Dave Ramsey Bs3 – 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 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.

When you e-file your federal income tax return, you save the IRS money because its employees do not have to spend time manually processing your return. And in return, you could get any refund you’re owed quicker, especially in the event that you have it directly deposited into your bank account.

But what about safety?  And can electronic filing really give you access to all the forms that you might need in case you have a complex tax situation?  Are there ever situations when you can not e-file?  Let us look at the benefits of e-filing, and if it might be the best filing option for your requirements.

If you are Considering e-filing, some of the advantages include:

  1. Quick confirmation your forms are received: The IRS will affirm a tax filing was received within one day of digital submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived safely. 

    Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or not.  Choosing direct deposit may also speed up the refund procedure.

  2. 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% rate of errors on paper filings.  The IRS also provides more info on issues discovered on e-filed yields compared with paper yields.

  3. Easy payment procedure: If you owe the IRS money, it is simpler to pay at your advantage if you e-file.  It’s possible to submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline.  And you can schedule electronic money transfers to 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 Direct pay service from the checking or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order. 

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

The fantastic news: Most taxpayers do decide to e-file and find those advantages — and the process of doing this is easy.

You have four options for submitting 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 could have the ability to use the IRS Free File program.  The forms do the math for you and provide standard guidance.  You can only do your federal return with all these forms. 
    2. Use an internet tax preparation service or tax software: Tax prep software and online filing services are alternatives.  These choices are an easy way to complete and e-file your own forms.  Some applications suppliers charge for their apps, Some are free.   The software asks you simple questions about your life and finances to steer you through the completion of your forms.  
    3. Get free, in-person tax help: 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 some services cater to particular demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re licensed IRS e-file providers. The IRS maintains a record of licensed providers, but you should be aware this option is likely to be the most costly one. 

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

Is e-filing really stable?

While e-filing is convenient, you could worry about security — particularly with so many data breaches.  But experts agree that this is not a problem which should dissuade you from e-filing.

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

Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put security measures in place to keep your data safe.  “Trainers normally use IRS specific APIs that need ab sessions,” Chow says.  “All of this can be routed over TLS encrypted connections.”

It’s 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 which is not private.

Bottom line

For many taxpayers, it is sensible to e-file a return because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just be 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 protected.