Warren Buffett Strategy – What to Consider When Filing My Taxes Online

Is e-filing a much better way to file 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 filed to the IRS are e-filed.  E-filing is popular because it is a win-win for taxpayers and the IRS.

When you e-file your federal income tax return, you conserve the IRS cash because its employees do not have to spend time manually processing your return. And in return, you could find any refund you are owed quicker, particularly in the event that you have it directly deposited into your bank account.

However, what about safety?  And can electronic filing actually provide you access to all the forms that you might need in case you’ve got a intricate tax situation?  Are there ever situations when you can not e-file?  Let us look at the benefits of e-filing, and whether it may be the best filing option for your requirements.

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

  1. Quick affirmation your forms are obtained: The IRS will confirm a tax filing has been received within one day of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it may take six to eight weeks to be given a tax refund.  With e-filing, you’ll get your money in three weeks or less.  Choosing direct deposit may also accelerate the refund process.

  3. Reduced likelihood of mistakes: In accordance with the IRS, there’s approximately a 1 percent error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more info on issues discovered on e-filed returns compared with paper returns.

  4. Easy payment process: If you owe the IRS money, it’s simpler to cover at your convenience if you e-file.  It’s possible to submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline.  And you can schedule electronic funds transfers to easily 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 using the IRS Immediate pay service from the checking account 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 after the filing due date (typically April 15) will lead to interest and penalties.

  5. Digital storage of taxation data: Submitting returns electronically implies there’s an electronic backup of your tax records.  If something happens to your paperwork, then you will have an electronic backup.

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

The way to e-file a tax return?

You have four options for submitting an electronically filed tax return to the IRS.

The forms do the math for you and provide standard guidance.  You can simply do your federal return with these kinds. 

  • Utilize an internet tax preparation tax or service software: Tax prep software and online filing services are alternatives.  These options are a simple way to finish and e-file your forms.  Some software providers charge for their programs, Some are liberated.   The software asks you simple questions about your own life and financing to guide you through the completion of your types.  
  • Get free, 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 income, and a few services cater to specific demographic groups. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a record of authorized providers, but you should be aware this option is likely to be the most costly one. 

    Using online tax preparation software is far and away the favored approach of the majority of taxpayers.  In fact, the IRS says it anticipated over four tax returns to be submitted through tax return prep software.

    Is e-filing really secure?

    While e-filing is convenient, you may be worried about safety — especially with all these data breaches.  But experts agree that this is not an issue that should deter you by e-filing.

    “In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your information in the email.”

    Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has set safety measures in place to keep your data safe.  “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says.  “All of this is routed over TLS encrypted links .”

    It is important to use a trusted service to help you file your taxes.  Chow advises not to e-file on a computer or utilize an online connection which isn’t private.

    Bottom line

    For most taxpayers, it is sensible to e-file a return because it’s the most convenient way to file 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 trusted source, so you can make certain the information which you supply to transmit to the IRS will be kept protected.