Warren Buffett Stock Investments – What to Consider When Filing My Taxes Online

Is e-filing a much better way to file your taxes? 

Americans and the IRS might not agree about everything, but they’re mostly on precisely the same page in regards to e-filing individual income tax returns.

Nearly all individual income tax returns submitted to the IRS are e-filed. 

In return, you could find any refund you are owed faster, particularly in the event that you have it directly deposited into your bank accounts.

But what about security?  And can electronic filing really give you access to all the forms that you may need if you’ve got a complex tax situation?  Are there ever situations when you can’t e-file?  Let us look at the advantages of e-filing, and whether it might be the best filing option for your requirements.

If you’re Considering e-filing, some of the advantages include:

  1. Quick confirmation your forms have been obtained: The IRS will affirm a tax filing was received within 24 hours of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely. 
  2. Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you are going to receive your money in 3 weeks or less.  Choosing direct deposit can also speed up the refund procedure.

  3. Reduced likelihood of errors: In accordance with the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% rate of errors on paper filings.  The IRS also provides more info on problems discovered on e-filed yields compared with paper returns.

  4. Easy payment procedure: If you owe the IRS money, it is easier to cover at your convenience if you e-file.  You can submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline.  You also have the choice to pay your balance by using the IRS Immediate pay service from the checking or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) will lead to interest and penalties.

  5. Digital storage of tax data: Submitting returns electronically means there is an electronic copy of your tax documents.  If something happens to your paperwork, you will have a digital backup.

The good news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing this is simple.

You have four choices for filing an electronically filed tax return to the IRS.

  • Free File Fillable Types — If your income is over $72,000 and you’re comfortable doing your taxes without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer basic advice.  You can only do your federal return with all these forms. 
  • Use an online tax preparation service or tax applications: Tax prep software and online filing services are options.  These choices are an easy way to finish and e-file your forms.  Some software suppliers charge for their programs, Some are liberated.   The program asks you simple questions about your life and financing to steer you through the completion of your forms.  
  • Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on income, and some services cater to specific demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they’re licensed IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this option is very likely to be the most costly one. 
  • Employing online tax preparation software is far and away the preferred approach of the majority of taxpayers.  In fact, the IRS says it expected more than four tax returns to be submitted through tax return prep software.

    Is e-filing really secure?

    While e-filing is suitable, you could be worried about security — especially with all these data breaches.  But experts agree that this is not an issue which should dissuade you from e-filing.

    “E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your information in the mail.”

    Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put security measures in place to keep your information safe.  “Vendors typically utilize IRS particular APIs that need ab sessions,” Chow says.  “All of this can be routed over TLS encrypted links “

    It is very important to use a trusted service to assist you file your taxes.  Chow advises not to e-file on a public computer or use an internet connection that is not private.

    Bottom line

    For many taxpayers, it makes sense to e-file a yield because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just be sure that you use tax planning software from a trusted source, so you can make certain the information which you provide to transmit to the IRS will be kept secure.