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

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

Americans and the IRS may not agree about everything, but they’re mostly on the 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 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 workers don’t have to spend time manually processing your return. In return, you could find any refund you are owed faster, especially in the event that you have it directly deposited into your bank account.

But what about safety?  And can digital filing really give you access to all of the forms you might need in case you’ve got a intricate tax situation?  Are there ever situations when you can’t e-file?  Let’s look at the advantages of e-filing, and whether it might be the very best filing option for your needs.

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

  1. Quick confirmation your forms are obtained: The IRS will affirm 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 . 

    Timely refunds: When you submit a paper filing, it may 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 speed up the refund process.

  2. Reduced likelihood of errors: In accordance with the IRS, there is around a 1 percent error rate on e-filed returns, 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 returns.

  3. Simple payment process: If you owe the IRS money, it is simpler to cover at your convenience when you e-file.  You can submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline.  And you can schedule electronic funds transfers to send the IRS what you owe on a date of your choosing — again, as long as the IRS receives your payment by Tax Day. You also have the option to pay your balance by using the IRS Immediate pay service from the checking account or savings accounts, 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) will lead to interest and penalties.

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

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

The way to e-file a tax return?

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program.  The types do the math for you and offer basic guidance.  You can simply do your federal return with these forms. 
    2. Utilize an internet tax preparation tax or service software: Tax preparation software and online filing services are alternatives.  These choices are an easy way to complete and e-file your forms.  Some applications suppliers charge for their apps, Some are liberated.   The software asks you simple questions about your own life and financing to guide you through the completion of your types.  
    3. Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free help is normally restricted based on earnings, and a few services appeal to specific demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older.  The IRS maintains a database 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 preferred approach of the majority of taxpayers.  In fact, the IRS says it anticipated over four in five 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 — particularly with so many data breaches.  But experts agree that this is not a problem that should dissuade you by e-filing.

“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your data in the mail.”

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

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

Bottom line

For most taxpayers, it is sensible to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just be sure that you use tax preparation software from a dependable source, so you may ensure the information which you supply to transmit to the IRS will be kept protected.