Ben Arthur 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’re largely on the 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.  E-filing is popular as it’s a win-win for taxpayers and the IRS.

When you e-file your federal income tax return, you save the IRS cash because its employees do not have to spend time manually processing your return. In return, you can get any refund you’re owed faster, especially in the event that you have it directly deposited to your bank accounts.

However, what about security?  And can digital filing actually provide you access to all the forms that you may need in case you have a complex tax situation?  Are there ever situations when you can’t e-file?  Let’s look at the advantages of e-filing, and if it might be the best filing option for your needs.

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

  1. Quick affirmation your forms are obtained: The IRS will affirm a tax filing was received within 24 hours of digital submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or not.  Choosing direct deposit may also speed up the refund process.

  3. Reduced chance of mistakes: In accordance with the IRS, there’s approximately a 1% error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more info on issues discovered on e-filed yields compared with paper returns.

  4. Simple payment process: If you owe the IRS money, it is simpler to cover at your convenience if you e-file.  It’s possible to submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline.  You also have the choice to pay your balance by making use of the IRS Direct pay service from your checking or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) can result in interest and penalties.

  5. Digital storage of taxation data: Submitting returns electronically implies there is an electronic backup of your tax records.  If something happens to your paperwork, then you’ll have a digital backup.

The good news: Most taxpayers do decide to e-file and get those advantages — and the process of doing so is easy.

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program.  The forms do the math for you and offer basic guidance.  You can simply do your federal return with all these forms. 
    2. Use an internet tax preparation service or tax software: Tax preparation software and online filing services are options.  These choices are an easy way to finish and e-file your forms.  Some software providers charge for their apps, Some are free.   The program asks you simple questions about your life and financing to guide you through the completion of your forms.  
    3. Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on income, and a few services cater to particular demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older.  The IRS maintains a database of licensed providers, but be aware this alternative is likely to be the most costly one. 

Employing online tax prep software is far and away the favored approach of most 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 could be worried about security — especially with so many data breaches.  But experts agree this is not an issue that should dissuade you by e-filing.

“In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your data in the email.”

Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put safety measures in place to keep your information secure.  “Vendors typically utilize IRS specific APIs that require ab sessions,” Chow says.  “All this is routed over TLS encrypted links .”

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

Bottom line

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