Warren Buffett’s Ten Rules – 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 precisely the exact same page in regards to e-filing individual income tax returns.

The majority of individual income tax returns submitted to the IRS are e-filed. 

In return, you can get any refund you’re owed faster, especially in the event that you have it directly deposited into your bank accounts.

But what about safety?  And can digital filing actually provide you access to all the forms you may need in case you’ve got a intricate tax situation?  Are there ever situations when you can’t 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’re Considering e-filing, a Few of the advantages include:

  1. Quick affirmation your forms are 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 that your forms have arrived . 

    Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or not.  Choosing direct deposit may also accelerate the refund process.

  2. Reduced likelihood of errors: In accordance with the IRS, there’s around a 1 percent error rate on e-filed yields, compared with a 20% speed of errors on paper filings.  The IRS also provides more information on issues discovered on e-filed yields compared with paper returns.

  3. Simple payment procedure: If you owe the IRS money, it’s easier to cover at your convenience if you e-file.  It’s possible to submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline.  Additionally you have the option to pay your balance by making use of the IRS Direct pay service from the checking or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) can result in penalties and interest.

  4. Digital storage of tax information: Submitting returns electronically means there is an electronic copy of your tax records.  So if something happens to your paperwork, then 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 simple.

The way to e-file a tax return?

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is over $72,000 and you’re comfortable doing your taxes without any 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 all these forms. 
    3. Use an internet tax preparation service or tax software: Tax preparation software and online filing services are options.  These choices are an easy way to complete and e-file your own forms.  Some software providers charge for their apps, Some are free.   The software asks you simple questions about your life and finances to steer you through the completion of your forms.  
    4. Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  But eligibility for free help is normally restricted based on income, and some services appeal to specific demographic groups. 
    5. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they’re authorized IRS e-file providers. The IRS maintains a record of authorized providers, but you should be aware this alternative is very likely to be the most costly one. 

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

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 is not an issue that should dissuade you by e-filing.

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

It is important to employ a trustworthy service to assist you record your taxes.  Chow advises not to e-file on a public computer or utilize an online connection which is not private.

Bottom line

For most taxpayers, it makes sense to e-file a yield since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just be sure to use tax preparation software from a dependable source, so you may ensure the information which you supply to transmit to the IRS will be kept protected.