Dave Ramsey Coaching – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree on everything, but they are largely on the same page when it comes to e-filing individual income tax returns.

Nearly all individual income tax returns filed to the IRS are e-filed.  E-filing is popular as it’s a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you save the IRS cash because its employees do not have to spend time manually processing your return. And in return, you can get any refund you’re owed faster, particularly in the event that you have it directly deposited into your bank accounts.

But what about safety?  And can electronic filing really give you access to all of the forms that you might need in case you’ve got a complex tax situation?  Are there situations when you can not e-file?  Let us look at the advantages of e-filing, and whether it might be the best filing choice for your needs.

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

  1. Quick affirmation your forms are obtained: The IRS will confirm a tax filing was received within one day of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived . 
  2. 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’ll receive your money in three weeks or less.  Choosing direct deposit may also accelerate the refund procedure.

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

  4. Simple payment process: If you owe the IRS money, it is easier to cover at your convenience when you e-file.  You can submit returns early and pay afterwards if necessary, as long as you pay by the April 15 filing deadline.  Additionally you have the option to pay your balance by making use of the IRS Direct 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.  Just be aware delaying payment following the filing due date (typically April 15) can result in penalties and interest.

  5. Digital storage of taxation data: Submitting returns electronically means there’s an electronic copy of your tax documents.  If something happens to your paperwork, you will have an electronic backup.

The fantastic news: Most taxpayers do opt to e-file and find those benefits — and the process of doing so is simple.

How to e-file a tax return?

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may be able 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 offer standard advice.  You can simply do your federal return with these forms. 
    3. Utilize an internet tax preparation tax or service applications: Tax prep software and online filing services are options.  These choices are an easy way to complete and e-file your forms.  Some applications providers 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.  
    4. Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free aid is typically limited based on earnings, and some providers appeal to specific demographic groups.  By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. 
    5. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a record of authorized providers, but you should 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 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 may worry about security — especially with all these data breaches.  But experts agree this isn’t an issue that should deter you by e-filing.

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

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

It’s very important to use a trustworthy service to assist you record your taxes.  Chow advises to not e-file on a computer or utilize an online connection that isn’t private.

Bottom line

For most taxpayers, it is sensible to e-file a return since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just make certain that you use tax preparation software from a trusted source, so you can ensure the information you provide to transmit to the IRS is going to be kept protected.