Dave Ramsey Budget Tool – 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 the exact 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. 

If you e-file your federal income tax return, you conserve the IRS cash because its workers don’t have to spend time manually processing your return. In return, you can get any refund you are owed quicker, particularly in the event that you have it directly deposited into your bank accounts.

However, what about safety?  And can digital filing actually provide you access to all of the forms that you may need if you’ve got 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 choice for your needs.

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

  1. Quick affirmation your forms have been received: The IRS will confirm a tax filing has been received within 24 hours of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely. 

    Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you are going to get your money in three weeks or less.  Choosing direct deposit may also accelerate the refund procedure.

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

  3. Easy payment process: If you owe the IRS money, it is easier to pay at your convenience when you e-file.  You can submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline.  And you can schedule electronic money 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. You also have the option to pay your balance by making use of the IRS Direct pay service from the checking account or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order. 

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

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

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may have the ability to use the IRS Free File program. 
    2. Free File Fillable Forms — If your income is more than $72,000 and you are comfortable doing your earnings without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide basic guidance.  You can only do your federal return with these forms. 
    3. Utilize an internet tax preparation service or tax applications: Tax prep software and online filing services are options.  These choices are a simple way to finish 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 guide you through the completion of your forms.  
    4. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  However, eligibility for free help is typically limited based on income, and a few providers appeal to particular demographic groups.  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 preparation software is far and away the favored approach of the majority of taxpayers.  In fact, the IRS says it expected 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 may worry about safety — especially with so many data breaches.  But experts agree that this isn’t an issue that should dissuade you from e-filing.

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

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

It is important to use a trustworthy service that will assist you file your taxes.  Chow advises not to e-file on a computer or utilize an online connection that is not confidential.

Bottom line

For most taxpayers, it makes sense 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 easy payment options.  Just make certain that you use tax planning software from a dependable source, so that you may make certain the information you provide to transmit to the IRS is going to be kept protected.