What Companies Is Warren Buffett Invested In – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree about everything, but they’re largely on precisely 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 as it’s a win-win for taxpayers and the IRS.

And in return, you could find any refund you are owed faster, especially in the event that you have it directly deposited to your bank accounts.

But what about safety?  And can electronic filing really provide you access to all the forms that you may need in case you’ve got a complex tax situation?  Are there situations when you can’t e-file?  Let us look at the advantages of e-filing, and if it may be the best filing option for your requirements.

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

  1. Quick confirmation 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 does not send any acknowledgment your forms have arrived . 

    Timely refunds: When you publish a paper filing, it can take six to eight months to be given a tax refund.  With e-filing, you are going to get your money in 3 weeks or less.  Choosing direct deposit may also speed up the refund process.

  2. Reduced chance of mistakes: According to the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings.  The IRS also provides more information on problems discovered on e-filed returns compared with paper returns.

  3. Simple payment procedure: If you owe the IRS money, it’s easier to pay at your convenience if you e-file.  You can submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline.  Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from the checking account or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

  4. Digital storage of taxation information: Submitting returns electronically implies there’s an electronic copy of your tax records.  If something happens to your paperwork, then you will have a digital backup.

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program.  The forms do the math for you and offer standard advice.  You can simply do your federal return with these kinds. 
    2. Utilize an online tax preparation service or tax applications: Tax preparation software and online filing services are alternatives.  These options are a simple way to finish and e-file your own forms.  Some applications providers charge for their apps, Some are free.   The program asks you simple questions about your own life and financing to guide you through the completion of your forms.  
    3. Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free aid is normally restricted based on earnings, and a few services appeal to specific demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they are authorized IRS e-file providers. The IRS maintains a record of authorized providers, but you should be aware this option is likely to be the most costly one. 

Employing online tax prep software is far and away the preferred approach of most taxpayers.  In fact, the IRS says it expected over four tax returns to be filed through tax return prep software.

Is e-filing really secure?

While e-filing is convenient, you may be worried about security — particularly with all these data breaches.  But experts agree this isn’t a problem that should dissuade you from e-filing.

“In actuality, 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 email.”

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

It’s very important to employ a trusted service that will assist you record 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 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 make certain that you use tax preparation software from a trusted source, so you may make certain the information which you provide to transmit to the IRS will be kept protected.