Baby Step 4 Dave Ramsey – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they’re largely on precisely the exact 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.  E-filing is popular because it’s a win-win for taxpayers and the IRS.

In return, you can find any refund you’re owed faster, particularly in the event that you have it directly deposited to your bank accounts.

But what about safety?  And can digital filing really give you access to all of the forms you may need if you have a intricate tax situation?  Are there ever situations when you can’t e-file?  Let’s look at the benefits of e-filing, and whether it may be the best filing choice for your requirements.

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

  1. Quick affirmation your forms are received: The IRS will affirm a tax filing was received within 24 hours of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely. 

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

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

  3. Simple payment procedure: If you owe the IRS money, it is easier to pay 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.  Additionally you have the choice to pay your balance by using the IRS Direct pay service from the checking account or savings account, 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 information: Submitting returns electronically implies there is a digital backup of your tax documents.  So if something happens to your paperwork, you’ll have a digital backup.

The fantastic news: Most taxpayers do opt to e-file and find those benefits — and the process of doing this is easy.

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or not as you could have the ability to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is over $72,000 and you are comfortable doing your earnings without assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide standard guidance.  You can only do your federal return with all these forms. 
    3. Utilize an internet tax preparation tax or service software: Tax prep software and online filing services are alternatives.  These options are a simple way to finish and e-file your own forms.  Some software providers charge for their programs, Some are liberated.   The program asks you simple questions about your own life and finances to guide you through the completion of your forms.  
    4. Get complimentary, 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 a few services appeal to particular demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. 
    5. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re licensed IRS e-file providers. The IRS maintains a record of authorized providers, but you should be aware this alternative is very likely to be the most costly one. 

Employing online tax prep software is far and away the favored approach of the majority of taxpayers.  In fact, the IRS says it expected over four in five 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 safety — especially with so many data breaches.  But experts agree that this is not an issue which should dissuade you by e-filing.

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

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

It is very important to use a trusted service that will help you record your taxes.  Chow advises to not e-file on a computer or utilize an online connection that is not confidential.

Bottom line

For most taxpayers, it is sensible 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 easy payment options.  Just be certain to use tax preparation software from a trusted source, so that you may ensure the information you supply to transmit to the IRS is going to be kept secure.