What Is Warren Buffett Investing In Now – 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 about everything, but they’re largely on precisely the same page when it comes to e-filing individual income tax returns.

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

When you e-file your federal income tax return, you save the IRS cash because its workers don’t have to spend time manually processing your return. And in return, you can find any refund you are owed faster, particularly if you have it directly deposited into your bank account.

However, what about safety?  And can digital filing really give you access to all of the forms you may need in case you have a complex tax situation?  Are there situations when you can’t e-file?  Let’s 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, a Few of the advantages include:

  1. Quick confirmation your forms have been received: 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 safely. 

    Timely refunds: When you submit a paper filing, it may take six to eight months to be given a tax refund.  With e-filing, you’ll get your money in three weeks or not.  Choosing direct deposit can also accelerate the refund procedure.

  2. Reduced chance of mistakes: 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 information on problems discovered on e-filed returns compared with paper yields.

  3. Easy payment process: If you owe the IRS money, it is easier to pay at your advantage when you e-file.  You can submit returns early and pay later if needed, provided that you pay from the April 15 filing deadline.  You also have the choice to pay your balance by using the IRS Immediate pay service from your checking account or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) will result in penalties and interest.

  4. Digital storage of taxation data: Submitting returns electronically implies there is a digital copy of your tax documents.  So if something happens to your paperwork, you’ll have a digital backup.

The good news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing so is simple.

The way to e-file a tax return?

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

The types do the math for you and offer standard guidance.  You can simply do your federal return with these kinds. 

  • Use an online tax preparation service or tax applications: Tax preparation software and online filing services are alternatives.  These options are a simple way to complete and e-file your own forms.  Some software providers charge for their apps, Some are liberated.   The software asks you simple questions about your own life and financing to steer you through the completion of your forms.  
  • Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free aid is normally restricted based on earnings, and some services cater to specific demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they’re authorized IRS e-file providers. The IRS maintains a record of licensed providers, but be aware this alternative 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 anticipated over four tax returns to be filed through tax return prep software.

    Is e-filing really stable?

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

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

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

    Bottom line

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