Dave Ramsey Chris Hogan Book – Is It Best To E-File My Taxes?

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

Americans and the IRS might not agree about everything, but they are largely 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. 

In return, you can find any refund you are owed faster, especially in the event that you have it directly deposited to your bank accounts.

However, what about safety?  And can electronic filing actually give you access to all of the forms you might need if you have a complex tax situation?  Are there ever situations when you can not e-file?  Let’s look at the advantages of e-filing, and if it might be the very best filing option for your requirements.

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

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

    Timely refunds: When you publish a paper filing, it can 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 less.  Choosing direct deposit may also accelerate the refund procedure.

  2. Reduced likelihood of errors: In accordance with the IRS, there’s around a 1 percent error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more info on issues discovered on e-filed returns compared with paper returns.

  3. Easy payment procedure: If you owe the IRS money, it’s easier to cover at your convenience if you e-file.  It’s possible to submit returns early and pay afterwards if necessary, as long as you pay by the April 15 filing deadline.  You also have the choice to pay your balance by making use of the IRS Immediate pay service from your checking account or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order. 

  4. Digital storage of tax information: Submitting returns electronically implies there is a digital copy of your tax records.  So if something happens to your paperwork, then you will have a digital backup.

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

How to e-file a tax return?

You have four choices for filing an electronically filed tax return to the IRS.

The types do the math for you and provide basic advice.  You can only do your federal return with these kinds. 

  • Utilize an internet tax preparation service or tax software: Tax prep software and online filing services are alternatives.  These options are an easy way to complete and e-file your own forms.  Some applications providers charge for their programs, Some are liberated.   The software asks you simple questions about your own life and financing to steer you through the completion of your types.  
  • Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on earnings, and some services cater to specific demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a database of authorized providers, but you should be aware this option is likely to be the most costly one. 

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

    Is e-filing really stable?

    While e-filing is suitable, you could worry about security — especially with so many data breaches.  But experts agree that this is not an issue which should dissuade you by e-filing.

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

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

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

    Bottom line

    For many taxpayers, it makes sense to e-file a yield because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just be certain to use tax preparation software from a trusted source, so that you can ensure the information you supply to transmit to the IRS will be kept secure.