Dave Ramsey Entreleadership Audio – Is It Best To E-File My Taxes?

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

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

The majority of individual income tax returns submitted 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 conserve the IRS cash because its workers do not need to spend time manually processing your return. And in return, you can find any refund you’re owed faster, especially in the event that you have it directly deposited into your bank account.

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

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

  1. Quick confirmation your forms have been obtained: The IRS will confirm a tax filing has been received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 

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

  2. Reduced likelihood of mistakes: In accordance with the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% speed 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’s easier to pay at your advantage if you e-file.  It’s possible to submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline.  You also have the choice to pay your balance by using the IRS Direct pay service from your checking or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order. 

  4. Digital storage of tax information: Submitting returns electronically means there is an electronic backup of your tax records.  If something happens to your paperwork, you’ll have an electronic backup.

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

How to e-file a tax return?

You have four choices for filing an electronically filed tax return to 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 tax or service software: Tax preparation software and online filing services are options.  These choices are an easy way to finish and e-file your own forms.  Some software suppliers charge for their programs, Some are free.   The program asks you simple questions about your life and finances to steer you through the completion of your forms.  
  • Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free help is typically limited based on income, and a few services appeal to specific demographic groups.  By way of example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re 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 favored approach of the majority of taxpayers.  Actually, the IRS says it expected over four tax returns to be filed through tax return prep program.

    Is e-filing really secure?

    While e-filing is suitable, you could worry about security — particularly with all these data breaches.  But experts agree this is not an issue which should dissuade you by e-filing.

    “In fact, it can 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, clarifies the IRS has put safety measures in place to keep your data secure.  “Trainers normally use IRS specific APIs that require ab sessions,” Chow says.  “All of this can be routed over TLS encrypted connections”

    It is very important to use a trustworthy service to assist you file your taxes.  Chow advises not to e-file on a public computer or utilize an online connection which is not confidential.

    Bottom line

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