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

Is e-filing a better way to record your taxes? 

Americans and the IRS may not agree about everything, but they are mostly on precisely the exact same page when it comes to e-filing individual income tax returns.

The majority of individual income tax returns submitted to the IRS are e-filed. 

If you e-file your federal income tax return, you save the IRS money because its employees do not have to spend time manually processing your return. And in return, you could get any refund you’re owed faster, especially in the event that you have it directly deposited to your bank accounts.

But what about safety?  And can digital filing actually provide you access to all the forms that you might need if you have a complex tax situation?  Are there situations when you can’t e-file?  Let us look at the advantages of e-filing, and whether it may be the best filing choice for your requirements.

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

  1. Quick affirmation your forms are received: The IRS will affirm a tax filing has been received within 24 hours of electronic submission.  For paper filers, the IRS does not 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 be given a tax refund.  With e-filing, you are going to receive your money in 3 weeks or not.  Choosing direct deposit can also speed up the refund procedure.

  3. Reduced likelihood of errors: According to the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more information on issues discovered on e-filed returns compared with paper yields.

  4. Simple payment procedure: If you owe the IRS money, it is easier to pay at your convenience if you e-file.  You can submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline.  And you’re able to schedule electronic funds transfers to send the IRS what you owe on a date of your choosing — again, as long as the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by making use of 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 result in penalties and interest.

  5. Digital storage of taxation data: Submitting returns electronically means there’s an electronic backup of your tax documents.  So if something happens to your paperwork, then you will have a digital backup.

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

How to e-file a tax return?

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may be able to use the IRS Free File program.  The types do the math for you and provide standard guidance.  You can simply do your federal return with these kinds. 
    2. Utilize an internet tax preparation tax or service applications: Tax prep software and online filing services are alternatives.  These choices are an easy way to complete and e-file your own forms.  Some software providers charge for their apps, Some are liberated.   The program asks you simple questions about your own life and finances to guide you through the completion of your types.  
    3. Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  But eligibility for free aid is typically limited based on earnings, and some services cater to particular demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a record of licensed providers, but be aware this alternative is likely to be the most costly one. 

Using online tax prep software is far and away the preferred approach of most taxpayers.  In fact, the IRS says it expected more than four in five tax returns to be filed through tax return prep program.

Is e-filing really secure?

While e-filing is convenient, you may worry about safety — particularly with all these data breaches.  But experts agree that this isn’t an issue which should dissuade you by e-filing.

“In fact, it can be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your information in the email.”

Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put safety measures in place to keep your information secure.  “Trainers normally use IRS specific APIs that need token sessions,” Chow says.  “All of this can be routed over TLS encrypted links “

It’s important to use a trustworthy service to assist you file your taxes.  Chow advises not to e-file on a public computer or use an internet connection which isn’t confidential.

Bottom line

For most taxpayers, it makes sense to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just make sure that you use tax preparation software from a dependable source, so that you can ensure the information you supply to transmit to the IRS will be kept protected.