Dave Ramsey Budget Percentages – 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 are largely on the exact 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 as it’s a win-win for taxpayers and the IRS.

In return, you can 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 the forms that you might need in case you’ve got a intricate tax situation?  Are there ever situations when you can’t e-file?  Let us look at the advantages of e-filing, and whether it might be the best filing choice for your needs.

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

  1. Quick confirmation your forms have been obtained: 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 that your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it can take six to eight months 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 procedure.

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

  4. Easy 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 afterwards if necessary, as long as you pay by the April 15 filing deadline.  Additionally you have the choice to pay your balance by using the IRS Immediate pay service from your checking account 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 data: Submitting returns electronically means there’s a digital backup of your tax records.  So if something happens to your paperwork, then you will have an electronic backup.

The good news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing so is easy.

How to e-file a tax return?

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program.  The forms do the math for you and offer standard advice.  You can only do your federal return with these forms. 
    2. Use an online tax preparation service or tax software: Tax preparation software and online filing services are options.  These options are an easy way to finish and e-file your forms.  Some applications suppliers charge for their apps, Some are free.   The software asks you simple questions about your own life and financing to steer you through the completion of your types.  
    3. Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  However, eligibility for free aid is normally restricted based on income, and some providers cater to particular demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.  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 anticipated more than four in five tax returns to be submitted through tax return prep program.

Is e-filing really secure?

While e-filing is suitable, you could be worried about safety — especially with all these data breaches.  But experts agree that this isn’t an issue that should deter you by e-filing.

“In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your data 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 particular APIs that require token sessions,” Chow says.  “All of this can be routed over TLS encrypted connections”

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

Bottom line

For many taxpayers, it is sensible to e-file a return since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options.  Just make sure to use tax preparation software from a dependable source, so that you may ensure the information you provide to transmit to the IRS will be kept protected.