Warren Buffett Success Story Summary – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree on everything, but they are largely 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 can find any refund you’re owed quicker, especially in the event that you have it directly deposited into your bank accounts.

However, what about safety?  And can digital filing actually give you access to all of the forms you may need if you have a intricate tax situation?  Are there situations when you can not e-file?  Let us look at the benefits of e-filing, and whether it may be the very best filing option for your needs.

If you are thinking about e-filing, a Few of the advantages include:

  1. Quick confirmation your forms are obtained: The IRS will confirm a tax filing has been received within one day of electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it may take six to eight months to receive a tax refund.  With e-filing, you’ll receive your money in 3 weeks or less.  Choosing direct deposit can also accelerate the refund procedure.

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

  4. Easy payment procedure: If you owe the IRS money, it is easier to pay at your advantage when 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.  Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from your checking or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) can lead to penalties and interest.

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

The good news: Most taxpayers do opt to e-file and find those advantages — and the process of doing so is simple.

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you may be able to use the IRS Free File program. 
    2. Free File Fillable Forms — If your income is more than $72,000 and you’re comfortable doing your earnings without any help, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard advice.  You can simply do your federal return with these kinds. 
    3. Use an internet tax preparation tax or service applications: Tax prep software and online filing services are options.  These options are a simple way to finish and e-file your forms.  Some software suppliers charge for their programs, Some are free.   The program asks you simple questions about your own life and financing to steer you through the completion of your forms.  
    4. Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  But eligibility for free aid is normally restricted based on income, and some services cater to specific demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. 
    5. 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 favored approach of the majority of taxpayers.  Actually, the IRS says it expected more than four tax returns to be filed through tax return prep software.

      Is e-filing really secure?

      While e-filing is convenient, you may worry about security — especially with so many data breaches.  But experts agree that this is not a problem that should dissuade you by e-filing.

      “In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your data in the mail.”

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

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

      Bottom line

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