Dave Ramsey 5 Steps – What to Consider When Filing My Taxes Online

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

Americans and the IRS might 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 submitted to the IRS are e-filed.  E-filing is a favorite because it is a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you save the IRS cash because its workers do not have to spend time manually processing your return. And in return, you can get any refund you’re owed quicker, particularly in the event that 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 have a intricate tax situation?  Are there situations when you can’t e-file?  Let’s look at the benefits of e-filing, and if 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 confirmation your forms have been received: The IRS will confirm a tax filing was received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it can take six to eight months to receive a tax refund.  With e-filing, you’ll get your money in 3 weeks or not.  Choosing direct deposit may also accelerate the refund procedure.

  3. Reduced chance of errors: According to the IRS, there is around a 1% 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 returns.

  4. Easy payment process: If you owe the IRS money, it is easier to cover at your advantage if you e-file.  It’s possible to submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline.  You also have the option to pay your balance by making use of the IRS Direct pay service from the checking or savings accounts, 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 lead to penalties and interest.

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

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

You have four options 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 types do the math for you and provide basic guidance.  You can simply do your federal return with all these forms. 
    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 complete and e-file your own forms.  Some software suppliers charge for their apps, Some are liberated.   The program asks you simple questions about your life and finances to guide you through the completion of your forms.  
    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 income, and a few providers cater to particular demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a record of authorized providers, but you should be aware this alternative is likely to be the most costly one. 

Using online tax prep software is far and away the preferred approach of the majority of taxpayers.  Actually, the IRS says it expected over four in five tax returns to be filed through tax return prep program.

Is e-filing really stable?

While e-filing is suitable, you may worry about safety — particularly with all these data breaches.  But experts agree this is not a problem which should dissuade you by e-filing.

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

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

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

Bottom line

For many taxpayers, it is sensible to e-file a yield since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just make sure that you use tax planning software from a trusted source, so that you may ensure the information which you supply to transmit to the IRS is going to be kept secure.