What Companies Does Warren Buffett Invest In – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they are mostly on precisely the same page when it comes to e-filing individual income tax returns.

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

And in return, you could get 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 digital filing really provide you access to all the forms that you may need in case you have a complex tax situation?  Are there situations when you can not e-file?  Let’s look at the advantages of e-filing, and whether it may be the very best filing option for your needs.

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

  1. Quick affirmation your forms are obtained: The IRS will confirm a tax filing has been received within one day of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived . 
  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 not.  Choosing direct deposit can also speed up the refund process.

  3. Reduced likelihood of errors: In accordance with 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 returns.

  4. Easy payment process: If you owe the IRS money, it is simpler to pay at your convenience when you e-file.  It’s possible to submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline.  You also have the choice to pay your balance by using the IRS Direct pay service from the checking account or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order. 

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

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

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may be able to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is over $72,000 and you are 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 simply do your federal return with all these forms. 
    3. Use an internet tax preparation tax or service software: Tax preparation software and online filing services are options.  These options are a simple way to complete and e-file your forms.  Some software providers charge for their programs, Some are liberated.   The program asks you simple questions about your life and financing to guide you through the completion of your forms.  
    4. 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 earnings, and some providers cater to particular demographic groups.  The IRS maintains a database of authorized providers, but you should be aware this alternative is very likely to be the most costly one. 

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

      Is e-filing really stable?

      While e-filing is convenient, you could worry about safety — especially with all these data breaches.  But experts agree this isn’t a problem that should deter you from e-filing.

      “E-filing a tax return has turned out to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product direction, advertising and revenue at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your information in the mail.”

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

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

      Bottom line

      For many taxpayers, it is sensible to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options.  Just make certain that you use tax planning software from a trusted source, so that you can make certain the information which you supply to transmit to the IRS is going to be kept secure.