Warren Buffett Story – 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 on everything, but they are largely on precisely the exact same page when it comes to e-filing individual income tax returns.

Nearly all individual income tax returns submitted to the IRS are e-filed.  E-filing is a favorite because it’s a win-win for taxpayers and the IRS.

When you e-file your federal income tax return, you save the IRS money because its workers don’t need to spend time manually processing your return. In return, you could find any refund you are owed faster, especially if you have it directly deposited into your bank account.

However, what about safety?  And can electronic filing really provide you access to all of the forms you may need in case you’ve got a complex tax situation?  Are there ever situations when you can not e-file?  Let us look at the advantages of e-filing, and whether it may be the very best filing choice for your needs.

If you’re thinking about 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 electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 

    Timely refunds: When you submit a paper filing, it can take six to eight months to receive a tax refund.  With e-filing, you’ll get your money in 3 weeks or less.  Choosing direct deposit may also speed up the refund process.

  2. Reduced likelihood of mistakes: In accordance with the IRS, there is approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more information on issues discovered on e-filed yields compared with paper yields.

  3. Simple payment process: If you owe the IRS money, it’s easier to pay at your convenience when you e-file.  You can submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline.  Additionally you have the choice to pay your balance by making use of the IRS Immediate pay service from the checking account or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) can result in penalties and interest.

  4. Digital storage of tax data: Submitting returns electronically implies there is a digital backup of your tax records.  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 find those advantages — and the process of doing so is easy.

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program.  The forms do the math for you and offer basic guidance.  You can simply do your federal return with all these kinds. 
    2. Utilize an internet tax preparation service or tax software: Tax prep software and online filing services are alternatives.  These choices are a simple way to complete and e-file your own forms.  Some software suppliers charge for their apps, Some are free.   The software asks you simple questions about your life and finances to guide you through the completion of your types.  
    3. Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on earnings, and some services appeal to particular demographic groups.  The IRS maintains a database of licensed providers, but be aware this option is very likely to be the most costly one. 

      Employing online tax prep software is far and away the favored approach of the majority of taxpayers.  In fact, the IRS says it anticipated more than four tax returns to be filed through tax return prep software.

      Is e-filing really stable?

      While e-filing is convenient, you may be worried about security — particularly with all these data breaches.  But experts agree that this is not a problem which should dissuade you by e-filing.

      “E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your personal information through an encrypted network as opposed to exposing your data in the email.”

      Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put security measures in place to keep your data secure.  “Trainers normally use IRS particular APIs that require ab sessions,” Chow says.  “All this is routed over TLS encrypted links .”

      It’s very important to employ a trusted service that will help you file your taxes.  Chow advises to not e-file on a computer or utilize an internet connection that is not confidential.

      Bottom line

      For most taxpayers, it makes sense to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options.  Just be sure that you use tax planning software from a dependable source, so that you can make certain the information you provide to transmit to the IRS will be kept protected.