Dave Ramsey Budget App – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree about everything, but they’re largely on precisely the same page in regards 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’s a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you conserve the IRS cash because its employees do not have to spend time manually processing your return. And in return, you could get any refund you’re owed faster, especially if you have it directly deposited to your bank account.

But what about safety?  And can electronic filing actually provide you access to all of the forms that you might need if 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 choice for your needs.

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

  1. Quick confirmation your forms are received: The IRS will confirm 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 . 
  2. Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you’ll get your money in three weeks or not.  Choosing direct deposit may also speed up the refund procedure.

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

  4. Easy payment procedure: If you owe the IRS money, it is simpler to pay at your convenience when you e-file.  You can submit returns early and pay later if necessary, provided that 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, as long as the IRS receives your payment by Tax Day. Additionally you have the option to pay your balance by making use of the IRS Direct pay service from the checking account 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 after the filing due date (typically April 15) can lead to penalties and interest.

  5. Digital storage of tax data: Submitting returns electronically means there’s a digital 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 find those benefits — and the process of doing so is easy.

How to e-file a tax return?

The forms do the math for you and provide basic advice.  You can only do your federal return with all these forms. 

  • Use an internet tax preparation service or tax software: Tax prep software and online filing services are alternatives.  These choices are a simple way to complete and e-file your forms.  Some applications providers charge for their programs, Some are liberated.   The software asks you simple questions about your own life and finances to steer you through the completion of your forms.  
  • Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  But eligibility for free aid is typically limited based on earnings, and a few providers appeal to particular demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a record of licensed providers, but you should be aware this alternative is likely to be the most costly one. 

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

    Is e-filing really secure?

    While e-filing is convenient, you may worry about security — particularly with so many data breaches.  But experts agree this is not an issue which should dissuade you by e-filing.

    “In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your information in the mail.”

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

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

    Bottom line

    For many taxpayers, it is sensible 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 choices.  Just be certain to use tax preparation software from a dependable source, so that you may ensure the information you supply to transmit to the IRS will be kept secure.