Basic Student Budget Dave Ramsey – Is It Best To E-File My Taxes?

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

Americans and the IRS may not agree about everything, but they are mostly on 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. 

And in return, you can get any refund you are owed faster, particularly if you have it directly deposited to your bank accounts.

But what about security?  And can electronic filing really provide you access to all the forms that you might need in case you’ve got a intricate tax situation?  Are there ever situations when you can not e-file?  Let us look at the benefits of e-filing, and if it may be the best filing option for your needs.

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

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

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

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

  3. Easy payment process: If you owe the IRS money, it’s easier to pay at your advantage if you e-file.  You can 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 money transfers to send the IRS what you owe on a date of your choosing again, as long as the IRS receives your payment by Tax Day. Additionally you have the option to pay your balance by using the IRS Immediate pay service from your checking 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 tax information: Submitting returns electronically implies there is a digital backup of your tax documents.  So if something happens to your paperwork, then you’ll have a digital backup.

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

The way to e-file a tax return?

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you may have the ability to use the IRS Free File program.  The forms do the math for you and provide basic advice.  You can only do your federal return with all these forms. 
    2. Utilize an internet tax preparation service or tax applications: Tax prep software and online filing services are options.  These choices are an easy way to finish and e-file your own forms.  Some software providers charge for their apps, Some are liberated.   The program asks you simple questions about your life and finances to steer you through the completion of your types.  
    3. Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free aid is normally restricted based on income, and a few providers cater to particular demographic groups.  The IRS maintains a database of authorized providers, but you should be aware this option is very likely to be the most costly one. 

Employing 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 in five tax returns to be submitted through tax return prep program.

Is e-filing really secure?

While e-filing is convenient, you may be worried about security — particularly with so many data breaches.  But experts agree this isn’t a problem which should dissuade you from e-filing.

“E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your information in the mail.”

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

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

Bottom line

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