Warren Buffett’s Portfolio 2020 – What to Consider When Filing My Taxes Online

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

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

Nearly all individual income tax returns filed to the IRS are e-filed.  E-filing is a favorite as it is a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you conserve the IRS money because its workers don’t need to spend time manually processing your return. In return, you can find any refund you’re owed faster, particularly in the event that you have it directly deposited to your bank accounts.

But what about security?  And can digital filing really give you access to all of the forms that you might need if you’ve got a intricate tax situation?  Are there ever situations when you can’t e-file?  Let us look at the benefits of e-filing, and if it might be the best filing choice for your requirements.

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

  1. Quick affirmation your forms are obtained: The IRS will affirm a tax filing has been received within one day of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it can take six to eight months to be given a tax refund.  With e-filing, you are going to receive your money in 3 weeks or less.  Choosing direct deposit may also accelerate the refund process.

  3. Reduced chance of errors: According to 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 problems discovered on e-filed yields compared with paper yields.

  4. Easy payment process: If you owe the IRS money, it’s easier to cover at your advantage when you e-file.  You can submit returns early and pay later if needed, as long as 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 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 after the filing due date (typically April 15) will lead to interest and penalties.

  5. Digital storage of taxation information: Submitting returns electronically means there’s a digital backup of your tax records.  So if something happens to your paperwork, then you’ll have a digital backup.

The good news: Most taxpayers do opt to e-file and find those advantages — and the practice of doing so is easy.

How to e-file a tax return?

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

  • Free File Fillable Forms — If your income is more than $72,000 and you are 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 offer standard guidance.  You can simply do your federal return with these forms. 
  • Use an online tax preparation tax or service software: Tax prep software and online filing services are alternatives.  These choices are an easy way to finish and e-file your own forms.  Some applications providers charge for their apps, 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 can find volunteers to help prepare and e-file returns.  But eligibility for free aid is normally restricted based on income, and a few services cater to specific demographic groups.  By way of example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a database of authorized providers, but you should be aware this option is very likely to be the most costly one. 

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

    Is e-filing really secure?

    While e-filing is suitable, you could worry about security — especially with all these data breaches.  But experts agree this is not a problem that should dissuade you by e-filing.

    “E-filing a tax return has turned out to be an extremely secure way to file your taxes,” says 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 rather than exposing your information in the mail.”

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

    It’s important to use a trusted service that will assist you file your taxes.  Chow advises to not e-file on a public computer or utilize an online connection which isn’t confidential.

    Bottom line

    For most taxpayers, it is sensible to e-file a yield because 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 trusted source, so you may make certain the information which you supply to transmit to the IRS is going to be kept secure.