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

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

Americans and the IRS may not agree about everything, but they’re largely on 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. 

If you e-file your federal income tax return, you save the IRS money because its workers do not have to spend time manually processing your return. In return, you can get any refund you are owed faster, especially if you have it directly deposited to your bank accounts.

But what about safety?  And can digital filing really provide you access to all the forms you might need if you’ve got a intricate tax situation?  Are there situations when you can not e-file?  Let’s look at the advantages of e-filing, and whether it might be the best filing option for your requirements.

If you are Considering 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 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived safely. 
  2. Timely refunds: When you publish a paper filing, it may take six to eight weeks to be given a tax refund.  With e-filing, you’ll receive your money in three weeks or less.  Choosing direct deposit may also speed up the refund process.

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

  4. Simple payment process: If you owe the IRS money, it is 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 from the April 15 filing deadline.  And you’re able to schedule electronic funds transfers to easily send the IRS what you owe on a date of your choosing — again, provided that the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by using the IRS Direct pay service from the checking or savings account, 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.

  5. Digital storage of taxation data: Submitting returns electronically means there is an electronic backup of your tax records.  So if something happens to your paperwork, you will have an electronic backup.

The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the process of doing this is easy.

The way to e-file a tax return?

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

  • Free File Fillable Forms — If your income is over $72,000 and you’re comfortable doing your earnings without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic advice.  You can only do your federal return with these kinds. 
  • Use an online 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 life and finances to steer you through the completion of your types.  
  • Get free, in-person tax help: 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 some services cater to particular demographic groups.  The IRS maintains a record of licensed providers, but be aware this option is very likely to be the most costly one. 
  • Employing online tax prep software is far and away the favored approach of the majority of taxpayers.  Actually, the IRS says it anticipated over four in five tax returns to be submitted through tax return prep software.

    Is e-filing really stable?

    While e-filing is suitable, you could be worried about safety — particularly with all these data breaches.  But experts agree that this isn’t an issue which should dissuade you from e-filing.

    “E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your information in the mail.”

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

    It is very important to employ a trusted service to assist you file your taxes.  Chow advises not to e-file on a computer or use an online connection which isn’t private.

    Bottom line

    For many taxpayers, it is sensible to e-file a return since it is 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 that you use tax preparation software from a dependable source, so you may ensure the information you supply to transmit to the IRS will be kept secure.