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

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

Americans and the IRS may not agree on everything, but they are 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. 

In return, you could find any refund you are owed faster, especially if you have it directly deposited to your bank accounts.

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

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

  1. Quick confirmation your forms have been received: The IRS will affirm a tax filing was received within one day of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that 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 receive your money in 3 weeks or not.  Choosing direct deposit can also accelerate the refund process.

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

  4. Simple payment procedure: If you owe the IRS money, it is easier to pay 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 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. 

  5. Digital storage of taxation information: Submitting returns electronically means there’s a digital backup of your tax records.  If something happens to your paperwork, then you’ll have a digital backup.

The good news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing so is simple.

How to e-file a tax return?

  • Free File Fillable Forms — If your income is more than $72,000 and you’re comfortable doing your taxes without any assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic guidance.  You can only do your federal return with these forms. 
  • Utilize an online tax preparation tax or service software: Tax prep software and online filing services are alternatives.  These options are an easy way to complete and e-file your forms.  Some software suppliers charge for their apps, Some are free.   The software asks you simple questions about your own life and finances 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 yields.  However, eligibility for free help is normally restricted based on income, and a few services appeal to particular demographic groups. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a database of licensed providers, but you should be aware this option is very likely to be the most costly one. 

    Using online tax prep software is far and away the favored approach of most taxpayers.  Actually, the IRS says it expected 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 — especially with so many data breaches.  But experts agree this is not a problem that should dissuade you from e-filing.

    “E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In actuality, 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 mail.”

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

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

    Bottom line

    For many taxpayers, it makes sense 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 planning software from a trusted source, so you can ensure the information which you supply to transmit to the IRS will be kept secure.