Dave Ramsey Budget Reviews – Is It Best To E-File My Taxes?

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

Americans and the IRS may not agree about 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.  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 money because its workers do not have to spend time manually processing your return. In return, you could get any refund you’re owed quicker, especially if you have it directly deposited into your bank accounts.

However, what about security?  And can electronic filing really give you access to all of the forms you might need in case you’ve got a intricate tax situation?  Are there ever situations when you can not e-file?  Let us look at the advantages of e-filing, and if it might be the best filing choice for your needs.

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

  1. Quick affirmation your forms have been received: The IRS will confirm a tax filing has been received within one day of digital submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it can take six to eight months 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 mistakes: According to the IRS, there is around a 1 percent error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more info on issues discovered on e-filed yields compared with paper yields.

  4. Easy payment process: If you owe the IRS money, it is simpler to pay at your convenience if you e-file.  It’s possible to submit returns early and pay later if necessary, provided that you pay by the April 15 filing deadline.  You also have the choice to pay your balance by using the IRS Immediate pay service from the checking account or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

  5. Digital storage of tax information: Submitting returns electronically means there is an electronic copy of your tax documents.  So if something happens to your paperwork, you will have an electronic backup.

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

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 these forms. 

  • Utilize an online tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  These choices are a simple way to complete and e-file your forms.  Some software providers charge for their programs, Some are free.   The software asks you simple questions about your own life and financing to steer you through the completion of your types.  
  • Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on income, and a few providers cater to particular demographic groups.  By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are authorized IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this alternative is likely to be the most costly one. 
  • Employing online tax preparation software is far and away the favored approach of the majority of taxpayers.  Actually, the IRS says it anticipated over 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 — particularly with all these data breaches.  But experts agree that this isn’t a problem which should deter you from e-filing.

    “E-filing a tax return has turned out to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your data in the email.”

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

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

    Bottom line

    For most taxpayers, it is sensible to e-file a return 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 sure to use tax planning software from a trusted source, so that you may make certain the information you provide to transmit to the IRS will be kept secure.