Dave Ramsey Cash Flow Plan – 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’re mostly on precisely 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.  E-filing is popular as it is a win-win for taxpayers and the IRS.

In return, you could find any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank account.

But what about security?  And can digital filing really give you access to all of the forms you may need if you’ve got a intricate tax situation?  Are there situations when you can’t e-file?  Let us look at the benefits of e-filing, and whether it might be the very best filing choice for your requirements.

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

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

    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 get your money in 3 weeks or not.  Choosing direct deposit may also speed up the refund process.

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

  3. Easy payment process: If you owe the IRS money, it’s easier to cover at your advantage if you e-file.  You can submit returns early and pay later if necessary, provided that you pay by the April 15 filing deadline.  Additionally you have the option to pay your balance by using the IRS Immediate pay service from your checking or savings accounts, submitting 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 implies there’s an electronic backup of your tax records.  If something happens to your paperwork, then you will have an electronic backup.

The fantastic news: Most taxpayers do opt to e-file and find those advantages — and the practice of doing this is easy.

The forms do the math for you and provide standard guidance.  You can only do your federal return with these forms. 

  • Utilize an internet tax preparation service or tax applications: Tax preparation software and online filing services are alternatives.  These choices are a simple way to complete and e-file your own forms.  Some applications providers charge for their programs, Some are free.   The program asks you simple questions about your life and finances to guide you through the completion of your forms.  
  • 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 earnings, and some services appeal 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 licensed providers, but be aware this alternative is very likely to be the most costly one. 
  • Employing online tax prep software is far and away the preferred 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 software.

    Is e-filing really stable?

    While e-filing is suitable, you may be worried about safety — especially with all these data breaches.  But experts agree this isn’t a problem which should dissuade you by e-filing.

    “In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your data in the email.”

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

    It’s important to employ a trusted service to help you record your taxes.  Chow advises not to e-file on a public computer or utilize an internet connection which is not private.

    Bottom line

    For most taxpayers, it makes sense to e-file a return since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just make sure that you use tax preparation software from a dependable source, so that you can ensure the information which you provide to transmit to the IRS will be kept protected.