What Stocks Does Warren Buffett Own 2016 – 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 on everything, but they’re largely on the exact same page in regards to e-filing individual income tax returns.

The majority of individual income tax returns filed to the IRS are e-filed.  E-filing is a favorite as it is a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you conserve the IRS money because its employees don’t need to spend time manually processing your return. In return, you could get any refund you are owed faster, particularly in the event that you have it directly deposited to your bank account.

But what about safety?  And can digital filing really provide you access to all of the forms you may need if you’ve got a complex tax situation?  Are there situations when you can not e-file?  Let’s look at the benefits of e-filing, and whether it may be the very best filing option for your requirements.

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

  1. Quick affirmation your forms are obtained: The IRS will affirm a tax filing has been received within one day of digital 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 months to receive a tax refund.  With e-filing, you’ll receive your money in 3 weeks or not.  Choosing direct deposit can also accelerate the refund procedure.

  3. Reduced likelihood of errors: According to the IRS, there’s around a 1 percent error rate on e-filed yields, compared with a 20% rate of errors on paper filings.  The IRS also provides more info on issues discovered on e-filed returns compared with paper yields.

  4. Easy payment procedure: If you owe the IRS money, it is simpler to cover at your advantage if you e-file.  It’s possible to submit returns early and pay later if necessary, provided that you pay by the April 15 filing deadline.  And you’re able to schedule electronic money 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 choice to pay your balance by using the IRS Direct pay service from your checking or savings accounts, 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.

  5. Digital storage of taxation data: Submitting returns electronically means there’s a digital backup of your tax records.  So if something happens to your paperwork, then you will have a digital backup.

The good news: Most taxpayers do decide to e-file and find those advantages — and the process of doing this is simple.

How to e-file a tax return?

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

  • Free File Fillable Forms — If your income is over $72,000 and you are comfortable doing your taxes without any help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic guidance.  You can simply do your federal return with these kinds. 
  • Utilize an online tax preparation tax or service applications: Tax preparation software and online filing services are options.  These options are an easy way to finish and e-file your own forms.  Some software suppliers 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 types.  
  • Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free help is normally restricted based on earnings, and some services appeal to specific demographic groups.  The IRS maintains a record of licensed 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 preferred approach of the majority of taxpayers.  Actually, 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 worry about security — particularly with all these data breaches.  But experts agree this isn’t a problem which should dissuade you by e-filing.

    “E-filing a tax return has turned out to be a very 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 as you’re sending your personal 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 set safety measures in place to keep your data safe.  “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says.  “All this is routed over TLS encrypted connections.”

    It’s very important to employ a trusted service to help you file your taxes.  Chow advises to not e-file on a computer or utilize an internet connection that is not confidential.

    Bottom line

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