7 Key Components Of Financial Planning Dave Ramsey – Is It Best To E-File My Taxes?

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

Americans and the IRS may not agree on everything, but they are largely on precisely the exact 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. 

If you e-file your federal income tax return, you conserve the IRS money because its workers do not have to spend time manually processing your return. In return, you can find any refund you are owed quicker, particularly if you have it directly deposited to your bank accounts.

However, what about security?  And can digital filing actually give 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 us look at the advantages of e-filing, and if it might be the best filing choice for your requirements.

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

  1. Quick affirmation your forms have been received: The IRS will affirm a tax filing was received within one day of electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived safely. 

    Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you’ll get your money in three weeks or less.  Choosing direct deposit may also speed up the refund procedure.

  2. Reduced likelihood of errors: According to the IRS, there’s approximately 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 problems discovered on e-filed yields compared with paper yields.

  3. Simple 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 needed, as long as you pay from the April 15 filing deadline.  And you’re able to schedule electronic funds 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 making use of the IRS Direct pay service from the checking account or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order. 

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

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

The way to e-file a tax return?

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

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

  • Utilize an online tax preparation tax or service software: Tax preparation software and online filing services are alternatives.  These choices are a simple way to finish and e-file your own forms.  Some applications suppliers charge for their programs, Some are liberated.   The program asks you simple questions about your life and finances to guide 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 providers cater to specific demographic groups.  The IRS maintains a database of authorized providers, but 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 most taxpayers.  Actually, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep program.

    Is e-filing really secure?

    While e-filing is suitable, you could be worried about security — particularly with all these data breaches.  But experts agree that this is not an issue that should deter you by e-filing.

    “In fact, it can be more secure than paper filing as 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, explains the IRS has put safety measures in place to keep your data safe.  “Trainers normally use IRS particular APIs that require ab sessions,” Chow says.  “All of this can be routed over TLS encrypted connections.”

    It’s important to use a trustworthy service that will assist you record your taxes.  Chow advises not to e-file on a computer or use an internet connection that is not confidential.

    Bottom line

    For most 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 be certain that you use tax planning software from a dependable source, so you may ensure the information which you provide to transmit to the IRS is going to be kept protected.