Warren Buffett Tracker Fund – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree on everything, but they are largely on the 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. 

In return, you can get any refund you are owed faster, particularly in the event that you have it directly deposited to your bank account.

But what about security?  And can electronic filing actually provide you access to all of the forms that you may need if you’ve got a complex tax situation?  Are there ever situations when you can not e-file?  Let’s look at the benefits of e-filing, and if it may be the very best filing option for your requirements.

If you are Considering 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 doesn’t send any acknowledgment your forms have arrived . 
  2. Timely refunds: When you submit a paper filing, it can take six to eight weeks to be given a tax refund.  With e-filing, you’ll get your money in three weeks or not.  Choosing direct deposit may also accelerate the refund process.

  3. Reduced chance of mistakes: 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 issues discovered on e-filed yields compared with paper returns.

  4. Simple payment procedure: If you owe the IRS money, it is easier to cover at your convenience when you e-file.  It’s possible to submit returns early and pay later if needed, provided that you pay by 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 fee, or paying by check or money order. 

  5. Digital storage of taxation information: Submitting returns electronically implies there’s a digital copy of your tax documents.  If something happens to your paperwork, you’ll have a digital backup.

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

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

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

  • Utilize an internet tax preparation service or tax applications: Tax preparation software and online filing services are options.  These choices are an easy way to finish and e-file your own forms.  Some software suppliers charge for their programs, Some are free.   The software asks you simple questions about your own life and finances to steer you through the completion of your types.  
  • Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free aid is typically limited based on earnings, and some providers appeal to particular demographic groups. 
  • 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 be aware this alternative is very likely to be the most costly one. 

    Using online tax prep software is far and away the preferred approach of most taxpayers.  In fact, the IRS says it expected more than four in five tax returns to be filed through tax return prep software.

    Is e-filing really secure?

    While e-filing is suitable, you may worry about security — especially with all these data breaches.  But experts agree that this isn’t a problem that should deter you from 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 leadership, marketing and revenue at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your information in the mail.”

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

    It’s important to employ a trusted service that will assist you record your taxes.  Chow advises to not e-file on a public computer or use an internet connection that isn’t 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 effortless payment choices.  Just be certain to use tax planning software from a trusted source, so that you can ensure the information you provide to transmit to the IRS is going to be kept protected.