Dave Ramsey Buying Stocks – 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 about everything, but they are largely on the same page in regards to e-filing individual income tax returns.

The majority of individual income tax returns filed to the IRS are e-filed. 

In return, you can find any refund you’re owed faster, especially if you have it directly deposited into your bank accounts.

But what about safety?  And can digital filing actually provide you access to all of the forms that you might need if you’ve got a complex tax situation?  Are there situations when you can not e-file?  Let’s look at the advantages of e-filing, and whether it might be the best filing option for your requirements.

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

  1. Quick affirmation your forms have been received: The IRS will affirm a tax filing has been received within 24 hours of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you publish a paper filing, it may take six to eight weeks to be given a tax refund.  With e-filing, you are going to get your money in 3 weeks or not.  Choosing direct deposit may also accelerate the refund procedure.

  3. Reduced likelihood of errors: In accordance with the IRS, there’s approximately a 1% error rate on e-filed returns, compared with a 20% rate of errors 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’s simpler to pay at your advantage if you e-file.  It’s possible to submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline.  And you can schedule electronic funds 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 using the IRS Immediate pay service from your checking account or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order. 

  5. Digital storage of taxation information: Submitting returns electronically implies there is a digital copy of your tax documents.  So if something happens to your paperwork, you’ll have an electronic backup.

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

    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.  The types do the math for you and provide basic advice.  You can only do your federal return with these forms. 
    2. Use an online tax preparation tax or service software: Tax prep software and online filing services are options.  These options are an easy way to finish and e-file your forms.  Some software suppliers charge for their programs, Some are liberated.   The software asks you simple questions about your own life and financing to guide you through the completion of your types.  
    3. Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free help is typically limited based on income, and a few services appeal to specific demographic groups.  The IRS maintains a record of licensed providers, but be aware this alternative is likely to be the most costly one. 

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

Is e-filing really secure?

While e-filing is suitable, you could be worried about safety — especially with so many data breaches.  But experts agree that this isn’t an issue which should dissuade 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 as opposed to exposing your information in the email.”

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.  “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says.  “All of this can be routed over TLS encrypted connections.”

It is important to employ a trustworthy service that will help you file your taxes.  Chow advises to not e-file on a public computer or utilize an online connection which isn’t private.

Bottom line

For most taxpayers, it makes sense to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just make sure to use tax planning software from a trusted source, so that you may ensure the information which you supply to transmit to the IRS will be kept secure.