Dave Ramsey Building – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they are largely on precisely the 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.  E-filing is popular as it is a win-win for taxpayers and the IRS.

In return, you can get any refund you are owed quicker, particularly if you have it directly deposited into your bank accounts.

However, what about security?  And can digital filing actually provide you access to all of the forms that you may need in case you’ve got a intricate 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 choice for your requirements.

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

  1. Quick confirmation 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 doesn’t send any acknowledgment that your forms have arrived . 
  2. Timely refunds: When you submit a paper filing, it may take six to eight months to be given a tax refund.  With e-filing, you are going to get your money in 3 weeks or not.  Choosing direct deposit can also accelerate the refund process.

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

  4. Simple payment process: If you owe the IRS money, it is easier to cover at your advantage if you e-file.  It’s possible to submit returns early and pay afterwards if needed, provided that you pay from 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 account, filing a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) will lead to penalties and interest.

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

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

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

    1. Use 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. 
    2. Free File Fillable Types — If your income is over $72,000 and you are comfortable doing your taxes without assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic advice.  You can simply do your federal return with all these kinds. 
    3. Use an internet tax preparation service or tax software: Tax prep software and online filing services are options.  These choices are a simple way to finish and e-file your forms.  Some applications providers charge for their programs, Some are liberated.   The program asks you simple questions about your life and financing to guide you through the completion of your types.  
    4. 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 normally restricted based on income, and some providers cater to specific demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.  The IRS maintains a record of authorized providers, but be aware this option is likely to be the most costly one. 

Employing online tax preparation software is far and away the preferred approach of the majority of taxpayers.  In fact, the IRS says it anticipated over four in five tax returns to be filed through tax return prep software.

Is e-filing really secure?

While e-filing is convenient, you may be worried about safety — 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 turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted network as opposed to exposing your information in the mail.”

Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set safety measures in place to keep your data secure.  “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says.  “All of this is routed over TLS encrypted connections.”

It’s 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 which is not private.

Bottom line

For many taxpayers, it is sensible to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just be certain that you use tax preparation software from a dependable source, so that you may ensure the information you supply to transmit to the IRS is going to be kept protected.