Dave Ramsey Compound Interest Calculator – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree on everything, but they’re mostly on precisely the exact same page in regards to e-filing individual income tax returns.

Nearly all individual income tax returns filed to the IRS are e-filed. 

If you e-file your federal income tax return, you conserve the IRS cash because its employees do not have to spend time manually processing your return. 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.

However, what about security?  And can digital filing really provide you access to all of the forms you might need in case you have a intricate tax situation?  Are there ever situations when you can’t e-file?  Let’s look at the advantages of e-filing, and if it may be the best filing choice for your needs.

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

  1. Quick affirmation your forms have been received: The IRS will confirm a tax filing was received within 24 hours 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 receive a tax refund.  With e-filing, you’ll get your money in three weeks or less.  Choosing direct deposit can also accelerate the refund procedure.

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

  4. Easy payment procedure: If you owe the IRS money, it’s simpler to cover at your convenience if you e-file.  It’s possible to submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline.  You also have the choice 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 fee, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) will result in interest and penalties.

  5. Digital storage of taxation information: Submitting returns electronically implies there is an electronic copy of your tax documents.  So if something happens to your paperwork, then you’ll have a digital backup.

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

How to e-file a tax return?

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

  • Use an online tax preparation tax or service software: Tax preparation software and online filing services are alternatives.  These options are an easy way to finish and e-file your own forms.  Some applications suppliers charge for their programs, Some are liberated.   The program asks you simple questions about your life and finances to guide you through the completion of your types.  
  • 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 providers cater to particular demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re licensed 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. 
  • Using online tax preparation software is far and away the favored 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 be worried about security — especially with so many data breaches.  But experts agree that this is not a problem which should dissuade you by e-filing.

    “E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In actuality, it can be more secure than paper filing since 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, clarifies the IRS has put safety measures in place to keep your information safe.  “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says.  “All this is routed over TLS encrypted connections.”

    It’s very important to use a trusted service to help you file your taxes.  Chow advises to not e-file on a computer or utilize an online connection which is not confidential.

    Bottom line

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