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

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

Americans and the IRS may not agree on everything, but they’re largely on precisely the exact same page in regards to e-filing individual income tax returns.

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

And in return, you could find any refund you’re owed quicker, particularly if you have it directly deposited to your bank account.

However, what about safety?  And can electronic filing really give you access to all the forms that you may need in case you’ve got a intricate tax situation?  Are there ever situations when you can’t e-file?  Let’s 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, a Few of the advantages include:

  1. Quick affirmation your forms have been 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 that your forms have arrived . 

    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 accelerate the refund process.

  2. Reduced likelihood of errors: According to the IRS, there is approximately a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings.  The IRS also provides more info on problems discovered on e-filed returns compared with paper returns.

  3. Simple payment process: If you owe the IRS money, it’s easier to cover at your convenience when you e-file.  It’s possible to submit returns early and pay later if necessary, provided that you pay by the April 15 filing deadline.  You also have the choice to pay your balance by making use of the IRS Direct pay service from your checking account or savings accounts, submitting 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 lead to penalties and interest.

  4. Digital storage of tax data: Submitting returns electronically means there is an electronic backup of your tax records.  If something happens to your paperwork, you’ll have an electronic backup.

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

    1. Use 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 types do the math for you and provide standard guidance.  You can simply do your federal return with these forms. 
    2. Use an internet tax preparation service or tax applications: Tax preparation 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 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 earnings, and some providers cater to specific demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this alternative is likely to be the most costly one. 

Employing online tax prep software is far and away the preferred approach of the majority of taxpayers.  Actually, the IRS says it expected more than four in five tax returns to be submitted through tax return prep software.

Is e-filing really stable?

While e-filing is convenient, you may be worried about safety — particularly with so many data breaches.  But experts agree that this is not an issue which 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 information security at SCIS Security, explains that the IRS has set safety measures in place to keep your information secure.  “Trainers normally use IRS specific APIs that need token sessions,” Chow says.  “All this is routed over TLS encrypted connections.”

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

Bottom line

For many taxpayers, it makes sense to e-file a yield since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make sure to use tax planning software from a dependable source, so that you can ensure the information you provide to transmit to the IRS is going to be kept protected.