Dave Ramsey Best Calls – 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’re largely on precisely the exact same page in regards to e-filing individual income tax returns.

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

And in return, you can find any refund you’re owed quicker, especially if you have it directly deposited to your bank account.

But what about safety?  And can electronic filing actually give 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 not e-file?  Let’s look at the benefits of e-filing, and if it might be the very best filing choice for your requirements.

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

  1. Quick affirmation your forms are received: 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 are going to receive your money in three weeks or not.  Choosing direct deposit can also accelerate the refund process.

  3. Reduced likelihood of errors: In accordance with the IRS, there’s approximately a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more info on issues discovered on e-filed returns compared with paper yields.

  4. Easy payment procedure: If you owe the IRS money, it’s simpler to cover at your convenience if you e-file.  You can submit returns early and pay later if needed, provided that you pay from the April 15 filing deadline.  Additionally you have the option to pay your balance by making use of the IRS Direct pay service from your checking or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

  5. Digital storage of tax data: Submitting returns electronically means there’s a digital backup of your tax documents.  So if something happens to your paperwork, then you’ll have a digital backup.

The fantastic news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing so is simple.

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

  • Free File Fillable Forms — If your income is over $72,000 and you’re comfortable doing your earnings without assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic guidance.  You can simply do your federal return with all these kinds. 
  • Use an internet tax preparation service or tax software: Tax prep software and online filing services are alternatives.  These options are an easy way to finish and e-file your own forms.  Some software suppliers charge for their apps, Some are liberated.   The software asks you simple questions about your life and finances 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 a few services cater to specific demographic groups. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they’re authorized IRS e-file providers. The IRS maintains a record of authorized 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.  Actually, the IRS says it anticipated over four tax returns to be submitted through tax return prep software.

    Is e-filing really secure?

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

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

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

    It’s important to use a trusted service to assist you file your taxes.  Chow advises not to e-file on a computer or utilize an internet connection which isn’t confidential.

    Bottom line

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