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

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

Americans and the IRS might not agree about everything, but they’re mostly on the exact 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 popular because it’s a win-win for taxpayers and the IRS.

In return, you could find any refund you’re owed faster, particularly if you have it directly deposited into your bank account.

But what about safety?  And can electronic filing really provide you access to all the forms 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 advantages of e-filing, and whether it might be the best filing choice for your needs.

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

  1. Quick affirmation your forms have been obtained: The IRS will confirm a tax filing has been received within 24 hours of digital submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund.  With e-filing, you are going to receive your money in 3 weeks or less.  Choosing direct deposit may also speed up the refund procedure.

  3. Reduced chance of errors: In accordance with the IRS, there is around a 1 percent 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 yields compared with paper yields.

  4. Easy payment procedure: If you owe the IRS money, it is simpler to pay at your advantage if you e-file.  You can submit returns early and pay afterwards if necessary, provided that 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, as long as the IRS receives your payment by Tax Day. You also have the option to pay your balance by making use of the IRS Immediate pay service from the checking or savings accounts, submitting 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) can lead to interest and penalties.

  5. Digital storage of tax data: Submitting returns electronically implies there’s a digital backup of your tax documents.  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 practice of doing so is easy.

    1. Use IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is more than $72,000 and you are comfortable doing your earnings without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic guidance.  You can simply do your federal return with all these kinds. 
    3. Use an internet tax preparation service or tax software: Tax prep software and online filing services are options.  These choices are a simple way to finish and e-file your forms.  Some software suppliers charge for their apps, Some are liberated.   The program asks you simple questions about your own life and finances to guide you through the completion of your types.  
    4. Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free help is normally restricted based on income, and a few providers appeal to specific demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older.  The IRS maintains a record of licensed providers, but you should be aware this alternative is 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 anticipated more than four tax returns to be submitted through tax return prep software.

      Is e-filing really secure?

      While e-filing is suitable, you may be worried about security — especially with all these data breaches.  But experts agree that this is not a problem that should dissuade you from 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, marketing and revenue at LegalShield. “In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your data in the mail.”

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

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

      Bottom line

      For most taxpayers, it makes sense to e-file a yield since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just make certain that you use tax planning software from a dependable source, so that you can ensure the information you supply to transmit to the IRS will be kept secure.