Dave Ramsey Car Buying – 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 on everything, but they’re largely on the exact 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.  E-filing is popular because it is a win-win for taxpayers and the IRS.

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

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

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

  1. Quick affirmation your forms have been obtained: The IRS will affirm a tax filing was received within one day of digital submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived . 

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

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

  3. Simple payment process: If you owe the IRS money, it is simpler to pay at your advantage when you e-file.  You can submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline.  And you’re able to schedule electronic money transfers to send the IRS what you owe on a date of your choosing — again, provided that the IRS receives your payment by Tax Day. Additionally you have the choice 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 fee, 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.

  4. Digital storage of tax data: Submitting returns electronically means there’s a digital copy of your tax records.  If something happens to your paperwork, you’ll have a digital backup.

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

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 not as you could 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’re 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 standard guidance.  You can only do your federal return with these forms. 
    3. Utilize an internet tax preparation tax or service software: Tax prep software and online filing services are alternatives.  These choices are a simple way to finish and e-file your forms.  Some applications suppliers charge for their apps, Some are liberated.   The software asks you simple questions about your life and financing to steer you through the completion of your types.  
    4. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free help is normally restricted based on income, and a few services appeal to particular demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. 
    5. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re licensed 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 prep software is far and away the favored approach of the majority of taxpayers.  In fact, the IRS says it expected more than four tax returns to be submitted through tax return prep software.

Is e-filing really secure?

While e-filing is suitable, you may worry about security — especially with all these data breaches.  But experts agree that this is not a problem that should deter you by 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, advertising and revenue at LegalShield. “In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted network rather than exposing your data in the mail.”

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

It is important to use a trustworthy service that will help you file your taxes.  Chow advises not to e-file on a computer or utilize an internet connection which is not private.

Bottom line

For many taxpayers, it makes sense to e-file a return because 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 certain to use tax planning software from a trusted source, so you can ensure the information you supply to transmit to the IRS is going to be kept protected.