Dave Ramsey Emergency Fund – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree on everything, but they’re largely on the same page when it comes 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 get any refund you’re owed quicker, particularly if you have it directly deposited to your bank accounts.

However, what about security?  And can electronic filing actually give you access to all the forms you may need if you have a intricate tax situation?  Are there ever situations when you can not e-file?  Let us look at the benefits of e-filing, and if it might be the very best filing option for your needs.

If you are Considering e-filing, some of the advantages include:

  1. Quick confirmation your forms are received: The IRS will confirm a tax filing was received within one day of digital submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived . 
  2. Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund.  With e-filing, you are going to receive your money in 3 weeks or not.  Choosing direct deposit can also speed up the refund process.

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

  4. Simple payment procedure: If you owe the IRS money, it is simpler to cover at your advantage when you e-file.  You can submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline.  And you’re able to schedule electronic funds transfers to easily send the IRS what you owe on a date of your choosing — again, provided that the IRS receives your payment by Tax Day. You also have the option to pay your balance by making use of the IRS Direct pay service from your checking or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

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

The good news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing so is easy.

How to e-file a tax return?

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

  • Free File Fillable Forms — If your income is over $72,000 and you are 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 basic guidance.  You can simply do your federal return with these forms. 
  • Utilize an internet tax preparation service or tax software: Tax preparation software and online filing services are alternatives.  These choices are a simple way to complete and e-file your own forms.  Some applications providers charge for their apps, Some are free.   The program asks you simple questions about your life and financing to steer 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.  But eligibility for free aid is typically limited based on income, and some providers appeal to particular demographic groups. 
  • 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 be aware this option is very likely to be the most costly one. 
  • Employing online tax preparation 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 filed through tax return prep program.

    Is e-filing really secure?

    While e-filing is convenient, you may be worried about safety — particularly with all these data breaches.  But experts agree this is not an issue that should deter you from e-filing.

    “E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your information in the email.”

    Dennis Chow, vice president of information security at SCIS Security, explains the IRS has set safety measures in place to keep your data safe.  “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says.  “All this can be routed over TLS encrypted connections”

    It is very important to employ a trustworthy service that will help you file your taxes.  Chow advises to not e-file on a computer or use an online connection that isn’t private.

    Bottom line

    For most taxpayers, it is sensible to e-file a return 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 that you use tax planning software from a trusted source, so you may ensure the information which you provide to transmit to the IRS is going to be kept protected.