Warren Buffett Trading Company – 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 mostly on the exact same page when it comes to e-filing individual income tax returns.

Nearly all individual income tax returns submitted to the IRS are e-filed. 

When you e-file your federal income tax return, you conserve the IRS cash because its workers don’t have to spend time manually processing your return. In return, you could get any refund you’re owed quicker, especially if 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 have a complex tax situation?  Are there ever situations when you can not e-file?  Let us look at the benefits of e-filing, and whether it might be the very best filing choice for your requirements.

If you’re thinking about e-filing, some of the advantages include:

  1. Quick confirmation your forms have been received: The IRS will affirm a tax filing has been received within one day of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it can take six to eight months to be given a tax refund.  With e-filing, you are going to get your money in three weeks or not.  Choosing direct deposit can also speed up the refund procedure.

  3. Reduced likelihood of mistakes: According to the IRS, there’s approximately 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 returns compared with paper yields.

  4. Easy payment procedure: If you owe the IRS money, it’s easier to pay at your advantage if you e-file.  It’s possible to submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline.  And you’re able to schedule electronic funds transfers to 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 option to pay your balance by making use of the IRS Immediate pay service from your checking or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

  5. Digital storage of tax information: Submitting returns electronically implies there’s an electronic backup of your tax records.  So if something happens to your paperwork, you will have a digital backup.

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

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you may have the ability 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 assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic guidance.  You can only do your federal return with these forms. 
    3. Use an online tax preparation tax or service software: Tax prep software and online filing services are alternatives.  These options are a simple way to complete and e-file your own forms.  Some applications providers charge for their apps, Some are free.   The software asks you simple questions about your life and finances to guide you through the completion of your forms.  
    4. Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free aid is typically limited based on earnings, and a few services appeal to specific demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. 
    5. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a record of licensed 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 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 program.

      Is e-filing really secure?

      While e-filing is convenient, you may worry about security — particularly with so many data breaches.  But experts agree this isn’t a problem that should deter you by e-filing.

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

      Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set safety measures in place to keep your information safe.  “Trainers normally use IRS specific APIs that require token sessions,” Chow says.  “All of this can be routed over TLS encrypted connections”

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

      Bottom line

      For many taxpayers, it makes sense to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just be sure to use tax planning software from a trusted source, so that you can ensure the information which you provide to transmit to the IRS will be kept secure.