What Is The Warren Buffett Rule – 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 are largely on the exact same page when it comes 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 because it is a win-win for taxpayers and the IRS.

And in return, you could get any refund you are owed quicker, particularly if you have it directly deposited to your bank account.

But what about security?  And can electronic filing really give you access to all the forms that you may need if you have a intricate 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 Considering e-filing, some of the advantages include:

  1. Quick confirmation your forms are obtained: The IRS will affirm a tax filing has been received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 

    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’ll receive your money in three weeks or less.  Choosing direct deposit can also accelerate the refund process.

  2. Reduced likelihood of mistakes: In accordance with the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more information on issues 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 when you e-file.  You can submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline.  You also have the option 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 following the filing due date (typically April 15) will result in interest and penalties.

  4. Digital storage of taxation data: Submitting returns electronically implies there is a digital backup of your tax records.  So if something happens to your paperwork, you will 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.

The way to e-file a tax return?

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

    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. 
    2. Free File Fillable Forms — If your income is more than $72,000 and you are comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic advice.  You can simply do your federal return with these forms. 
    3. Utilize an online tax preparation tax or service software: Tax preparation software and online filing services are options.  These options are a simple way to finish and e-file your own forms.  Some applications suppliers charge for their apps, Some are free.   The software 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 aid: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free aid is normally restricted based on income, and some providers cater to specific demographic groups. 
    5. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this option is likely to be the most costly one. 

Using online tax prep software is far and away the preferred approach of the majority of taxpayers.  In fact, the IRS says it expected more than four tax returns to be filed through tax return prep program.

Is e-filing really stable?

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

“In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your information in the email.”

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

It is very important to use a trustworthy service that will help you file your taxes.  Chow advises not to e-file on a public computer or use an internet connection which isn’t private.

Bottom line

For many taxpayers, it makes sense to e-file a yield since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just be sure to use tax preparation software from a trusted source, so that you may ensure the information which you provide to transmit to the IRS is going to be kept protected.