Warren Buffett Work Ethic – 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 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 could find any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank account.

However, what about security?  And can electronic filing really give you access to all the forms you might need if you’ve got a complex tax situation?  Are there situations when you can’t e-file?  Let us 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 confirmation your forms are received: The IRS will affirm a tax filing was received within 24 hours of digital submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived safely. 

    Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive 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 mistakes: According to the IRS, there is around a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings.  The IRS also provides more information on issues discovered on e-filed yields compared with paper yields.

  3. Easy payment procedure: If you owe the IRS money, it is easier to cover at your convenience if you e-file.  It’s possible to submit returns early and pay afterwards if necessary, as long as 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 or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) will result in penalties and interest.

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

The good news: Most taxpayers do decide to e-file and get those advantages — and the process of doing so is easy.

  • Free File Fillable Forms — If your income is more than $72,000 and you’re comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer standard guidance.  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 an easy way to complete 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 guide you through the completion of your forms.  
  • 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 normally restricted based on earnings, and some services cater to specific demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older.  The IRS maintains a database of authorized providers, but you should be aware this alternative is likely to be the most costly one. 
  • Using online tax prep software is far and away the favored 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 stable?

    While e-filing is convenient, you could be worried about security — particularly with all these data breaches.  But experts agree that this is not a problem which should dissuade 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 direction, advertising and sales at LegalShield. “In fact, it can be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your data in the mail.”

    Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has put security measures in place to keep your data secure.  “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says.  “All this is routed over TLS encrypted links .”

    It’s very important to use a trustworthy service to assist you record your taxes.  Chow advises to not e-file on a computer or use an internet connection which is not private.

    Bottom line

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