Compound Interest Dave Ramsey – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree about everything, but they are mostly on precisely the same page when it comes to e-filing individual income tax returns.

The majority of individual income tax returns filed to the IRS are e-filed. 

In return, you could get any refund you’re owed faster, especially if you have it directly deposited to your bank accounts.

But what about security?  And can electronic filing really provide you access to all of the forms that you might need if you’ve got a intricate tax situation?  Are there situations when you can’t e-file?  Let’s look at the advantages of e-filing, and whether it might be the very best filing option for your requirements.

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

  1. Quick affirmation your forms are received: The IRS will confirm a tax filing was received within one day of electronic submission.  For paper filers, the IRS doesn’t 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 are going to receive your money in 3 weeks or not.  Choosing direct deposit can also accelerate the refund procedure.

  3. Reduced chance of mistakes: In accordance with 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 issues discovered on e-filed yields compared with paper returns.

  4. Easy payment procedure: If you owe the IRS money, it is simpler to pay at your convenience if you e-file.  It’s possible to submit returns early and pay later if needed, provided that you pay by 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, provided that the IRS receives your payment by Tax Day. You also have the option to pay your balance by using the IRS Direct pay service from your checking account 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 after the filing due date (typically April 15) will result in penalties and interest.

  5. Digital storage of tax information: Submitting returns electronically implies there is an electronic copy of your tax documents.  So if something happens to your paperwork, then you will have an electronic backup.

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

How to e-file a tax return?

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 less you could be able to use the IRS Free File program.  The forms do the math for you and offer standard advice.  You can only do your federal return with these kinds. 
    2. Use an online tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  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 own 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 returns.  But eligibility for free aid is typically limited based on earnings, and some providers cater to specific demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a database of licensed providers, but you should be aware this option is very likely to be the most costly one. 

      Employing online tax preparation software is far and away the favored approach of most taxpayers.  Actually, the IRS says it expected more than 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 safety — particularly with so many data breaches.  But experts agree that this is not a problem that should deter you from e-filing.

      “E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, advertising and sales at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your information in the mail.”

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

      It’s very important to employ a trusted service to help you record your taxes.  Chow advises not to e-file on a public computer or utilize an internet connection which isn’t private.

      Bottom line

      For most taxpayers, it is sensible to e-file a return because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just be certain that you use tax preparation software from a dependable source, so that you may make certain the information which you provide to transmit to the IRS will be kept secure.