Dave Ramsey Collections – 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 exact same page when it comes to e-filing individual income tax returns.

Nearly all individual income tax returns submitted to the IRS are e-filed.  E-filing is a favorite because it is a win-win for taxpayers and the IRS.

When you e-file your federal income tax return, you conserve the IRS cash because its employees don’t have to spend time manually processing your return. And in return, you can get any refund you are owed quicker, especially if you have it directly deposited into your bank account.

But what about safety?  And can digital filing really provide you access to all the forms that you may need if you have 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 may be the very best filing option for your needs.

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 one day of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived . 

    Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund.  With e-filing, you’ll get your money in 3 weeks or less.  Choosing direct deposit may also accelerate the refund process.

  2. Reduced likelihood 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 info on issues discovered on e-filed returns compared with paper yields.

  3. Simple payment process: If you owe the IRS money, it is easier to cover at your convenience if you e-file.  It’s possible to submit returns early and pay later if needed, provided that you pay by the April 15 filing deadline.  You also have the option to pay your balance by making use of the IRS Direct pay service from your checking or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order. 

  4. Digital storage of taxation data: Submitting returns electronically implies there is an electronic copy of your tax records.  If something happens to your paperwork, you will have an electronic backup.

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

You have four options for submitting 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.  The forms do the math for you and offer basic advice.  You can only do your federal return with these kinds. 
    2. Use an online tax preparation service or tax applications: Tax preparation software and online filing services are options.  These options are an easy way to complete and e-file your forms.  Some software providers charge for their apps, Some are free.   The software asks you simple questions about your life and finances to steer you through the completion of your forms.  
    3. Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free aid is normally restricted based on income, and a few providers appeal to particular demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they’re licensed IRS e-file providers. The IRS maintains a record of authorized providers, but you should be aware this option is likely to be the most costly one. 

Using online tax prep software is far and away the favored approach of the majority of taxpayers.  In fact, the IRS says it anticipated over four tax returns to be submitted through tax return prep software.

Is e-filing really stable?

While e-filing is convenient, you could worry about safety — especially with all these data breaches.  But experts agree that this isn’t a problem that should deter you by e-filing.

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

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

It’s very important to employ a trusted service to assist you file your taxes.  Chow advises to not e-file on a computer or utilize an internet connection which isn’t private.

Bottom line

For many taxpayers, it makes sense to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options.  Just make sure that you use tax preparation software from a dependable source, so you may ensure the information you provide to transmit to the IRS will be kept secure.