Dave Ramsey Baby Step 3B – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree on 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.  E-filing is a favorite because it’s a win-win for taxpayers and the IRS.

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

But what about safety?  And can digital filing really give you access to all the forms you might need if you have a complex tax situation?  Are there situations when you can not e-file?  Let’s look at the advantages of e-filing, and if it may be the very best filing option for your requirements.

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

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

    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 less.  Choosing direct deposit can also accelerate the refund procedure.

  2. Reduced likelihood of mistakes: In accordance with the IRS, there is approximately a 1 percent error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more info on problems discovered on e-filed yields compared with paper yields.

  3. Easy payment procedure: If you owe the IRS money, it’s easier to pay at your convenience if you e-file.  You can submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline.  You also have the choice to pay your balance by making use of the IRS Immediate pay service from the checking or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) can lead to interest and penalties.

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

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

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

    1. Use 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 offer standard advice.  You can simply do your federal return with these kinds. 
    2. Utilize an online tax preparation service or tax applications: Tax prep software and online filing services are alternatives.  These options are an easy way to finish and e-file your forms.  Some software providers charge for their apps, Some are liberated.   The software asks you simple questions about your own life and financing to steer you through the completion of your types.  
    3. Get complimentary, in-person tax help: 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 providers cater to particular demographic groups.  The IRS maintains a record of licensed providers, but you should be aware this alternative 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 expected more than four in five tax returns to be submitted through tax return prep program.

Is e-filing really stable?

While e-filing is suitable, you could be worried about security — particularly with so many data breaches.  But experts agree this is not a problem which should deter you by e-filing.

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

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

It is very important to employ a trusted service that will assist you file your taxes.  Chow advises not to e-file on a public computer or utilize an online connection which isn’t confidential.

Bottom line

For many taxpayers, it is sensible 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 easy payment choices.  Just be certain to use tax planning software from a dependable source, so you may make certain the information which you provide to transmit to the IRS is going to be kept protected.