Dave Ramsey Bank – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree about everything, but they’re mostly on precisely 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 a favorite because it is a win-win for taxpayers and the IRS.

When you e-file your federal income tax return, you conserve the IRS cash because its employees don’t have to spend time manually processing your return. In return, you can get any refund you are owed faster, particularly if you have it directly deposited to your bank accounts.

However, what about safety?  And can electronic filing really provide you access to all the forms you might need in case you’ve got a complex tax situation?  Are there ever situations when you can’t e-file?  Let us 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 affirmation your forms have been obtained: 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 . 
  2. Timely refunds: When you publish a paper filing, it may take six to eight weeks to be given a tax refund.  With e-filing, you are going to receive your money in 3 weeks or less.  Choosing direct deposit can also speed up the refund procedure.

  3. Reduced chance of errors: In accordance with the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.

  4. Easy payment process: If you owe the IRS money, it’s simpler to pay at your convenience if you e-file.  It’s possible to submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline.  And you’re able to schedule electronic money 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 choice to pay your balance by using the IRS Immediate pay service from your checking or savings account, 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) will result in interest and penalties.

  5. Digital storage of taxation information: Submitting returns electronically implies there is an electronic copy of your tax documents.  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 process of doing so is simple.

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

The types do the math for you and provide standard guidance.  You can only do your federal return with all these forms. 

  • Utilize an internet tax preparation service or tax applications: Tax prep software and online filing services are alternatives.  These options are a simple way to finish and e-file your own forms.  Some applications suppliers charge for their apps, Some are liberated.   The program asks you simple questions about your life and financing to steer you through the completion of your forms.  
  • Get complimentary, 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 income, and a few providers appeal to specific demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.  The IRS maintains a database of authorized providers, but be aware this alternative 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 over four in five tax returns to be submitted through tax return prep software.

    Is e-filing really secure?

    While e-filing is suitable, you may be worried about security — particularly with so many data breaches.  But experts agree that this isn’t an issue that should deter you by e-filing.

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

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

    It’s very important to use a trustworthy service that will assist you record your taxes.  Chow advises to not e-file on a computer or utilize an online connection which isn’t private.

    Bottom line

    For many taxpayers, it makes sense 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 make sure to use tax preparation software from a dependable source, so that you may ensure the information which you supply to transmit to the IRS will be kept secure.