Dave Ramsey Chapter 4 Hidden Costs Of Credit – Is It Best To E-File My Taxes?

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

Americans and the IRS may not agree about everything, but they’re mostly on precisely 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.  E-filing is popular as it’s a win-win for taxpayers and the IRS.

In return, you can get any refund you’re owed faster, particularly in the event that you have it directly deposited to your bank account.

But what about safety?  And can electronic filing really provide you access to all of the forms that you might need in case you’ve got a complex tax situation?  Are there ever situations when you can’t e-file?  Let’s look at the benefits of e-filing, and if it might be the best filing choice for your requirements.

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

  1. Quick confirmation your forms have been received: The IRS will confirm a tax filing was received within one day of digital submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you submit 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 three weeks or less.  Choosing direct deposit can also speed up the refund procedure.

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

  4. Easy payment process: If you owe the IRS money, it is easier to pay at your advantage if you e-file.  You can submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline.  Additionally you have the choice to pay your balance by using the IRS Immediate pay service from your checking or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) can result in interest and penalties.

  5. Digital storage of taxation data: Submitting returns electronically implies there’s an electronic backup of your tax records.  If something happens to your paperwork, you’ll have a digital backup.

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

  • Free File Fillable Forms — If your income is more than $72,000 and you’re comfortable doing your taxes without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard advice.  You can simply do your federal return with these kinds. 
  • Use an online tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  These options are an easy way to complete and e-file your own forms.  Some software suppliers charge for their programs, Some are liberated.   The software asks you simple questions about your life and finances to steer you through the completion of your types.  
  • Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free help is normally restricted based on income, and a few services appeal to specific demographic groups.  By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they’re authorized IRS e-file providers. The IRS maintains a record of licensed providers, but you should be aware this option is very likely to be the most costly one. 
  • Employing online tax prep software is far and away the favored approach of most 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 stable?

    While e-filing is convenient, you may worry about security — particularly with all these data breaches.  But experts agree this isn’t a problem which should dissuade you from e-filing.

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

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

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

    Bottom line

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