Dave Ramsey Approved Mutual Funds – Is It Best To E-File My Taxes?

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

Americans and the IRS may not agree about everything, but they’re largely on the same page in regards to e-filing individual income tax returns.

Nearly all individual income tax returns filed to the IRS are e-filed. 

And in return, you could get any refund you are owed quicker, particularly if you have it directly deposited into your bank account.

However, what about safety?  And can electronic filing really give you access to all the forms that you may need if you’ve got a complex tax situation?  Are there situations when you can not 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, some of the advantages include:

  1. Quick affirmation your forms have been obtained: The IRS will confirm a tax filing has been received within 24 hours of digital submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived . 
  2. Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund.  With e-filing, you’ll get your money in three weeks or less.  Choosing direct deposit may also accelerate the refund procedure.

  3. Reduced likelihood of mistakes: According to the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more information on problems discovered on e-filed returns compared with paper yields.

  4. Easy payment procedure: If you owe the IRS money, it is easier to cover at your convenience if you e-file.  You can submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline.  And you’re able to schedule electronic funds transfers to easily 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 the checking or savings account, submitting 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) will lead to interest and penalties.

  5. Digital storage of taxation information: Submitting returns electronically means there is an electronic copy of your tax records.  So if something happens to your paperwork, then you’ll have an electronic backup.

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

  • Free File Fillable Types — If your income is over $72,000 and you’re comfortable doing your taxes without any help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer standard advice.  You can simply do your federal return with all these kinds. 
  • Utilize an online tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  These choices are a simple way to complete and e-file your own forms.  Some applications suppliers charge for their programs, Some are free.   The program asks you simple questions about your life and financing to steer you through the completion of your forms.  
  • Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free help is typically limited based on earnings, and some services appeal to particular demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older.  The IRS maintains a database of licensed providers, but be aware this option is very likely to be the most costly one. 

    Employing online tax preparation software is far and away the preferred approach of most taxpayers.  In fact, the IRS says it anticipated over four tax returns to be submitted through tax return prep program.

    Is e-filing really stable?

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

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

    Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has put safety measures in place to keep your data secure.  “Trainers normally use IRS particular APIs that require ab sessions,” Chow says.  “All of this can be routed over TLS encrypted links “

    It is very important to employ a trusted service to help you record your taxes.  Chow advises to not e-file on a computer or use an online connection that isn’t private.

    Bottom line

    For many taxpayers, it makes sense to e-file a yield because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make certain to use tax planning software from a dependable source, so you can ensure the information you provide to transmit to the IRS will be kept secure.