Warren Buffett Tax Secretary – 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 about everything, but they are largely on 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.  E-filing is a favorite as it is a win-win for taxpayers and the IRS.

In return, you can get any refund you’re owed faster, especially in the event that you have it directly deposited into your bank accounts.

But what about safety?  And can digital filing actually provide you access to all of the forms that you might need if you have a intricate tax situation?  Are there ever situations when you can not e-file?  Let’s look at the advantages of e-filing, and if it might be the very best filing choice for your needs.

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

  1. Quick affirmation your forms are received: The IRS will affirm a tax filing was received within one day 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 may take six to eight months to be given a tax refund.  With e-filing, you are going to receive your money in three weeks or less.  Choosing direct deposit may also accelerate the refund procedure.

  2. Reduced likelihood of errors: According to the IRS, there is approximately a 1 percent 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 yields.

  3. Simple payment process: If you owe the IRS money, it is simpler to cover at your advantage when you e-file.  It’s possible to submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline.  Additionally you have the choice to pay your balance by using the IRS Direct 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.

  4. Digital storage of taxation information: Submitting returns electronically implies there is an electronic copy of your tax records.  So if something happens to your paperwork, then you’ll have a digital backup.

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

The way to e-file a tax return?

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is more than $72,000 and you’re comfortable doing your earnings without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide basic advice.  You can simply do your federal return with all these kinds. 
    3. Use an online tax preparation service or tax applications: Tax preparation software and online filing services are alternatives.  These choices are an easy way to finish and e-file your forms.  Some software suppliers charge for their apps, Some are liberated.   The program asks you simple questions about your life and finances to guide you through the completion of your forms.  
    4. Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free help is typically limited based on income, and a few services cater to particular demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. 
    5. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a database of authorized providers, but you should be aware this alternative is very likely to be the most costly one. 

      Using online tax prep software is far and away the favored approach of the majority of taxpayers.  Actually, the IRS says it expected over four tax returns to be filed through tax return prep software.

      Is e-filing really stable?

      While e-filing is suitable, you could worry about security — particularly with all these data breaches.  But experts agree this is not a problem that should dissuade you from e-filing.

      “E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, advertising and sales at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your data in the email.”

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

      It’s very important to employ a trusted service that will help you record your taxes.  Chow advises to not e-file on a public computer or use an online connection which is not private.

      Bottom line

      For most taxpayers, it makes sense to e-file a return since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just make certain to use tax preparation software from a trusted source, so that you can ensure the information which you provide to transmit to the IRS will be kept secure.