Dave Ramsey Envelope System Wallet – What to Consider When Filing My Taxes Online

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

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

The majority of individual income tax returns filed to the IRS are e-filed.  E-filing is popular 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 do not have to spend time manually processing your return. In return, you can find any refund you are owed quicker, especially if you have it directly deposited to your bank account.

But what about safety?  And can digital filing really give you access to all the forms you may need in case you have a intricate tax situation?  Are there situations when you can not e-file?  Let us look at the advantages of e-filing, and whether it may be the best filing option for your needs.

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

  1. Quick confirmation your forms have been obtained: The IRS will affirm a tax filing was received within one day of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely. 

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

  2. Reduced likelihood of errors: According to the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% rate of mistakes 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 easier to pay at your convenience when you e-file.  You can submit returns early and pay afterwards if needed, as long as you pay from the April 15 filing deadline.  You also have the option to pay your balance by making use of the IRS Immediate pay service from your checking account or savings account, submitting 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 means there’s a digital copy 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 process of doing this is easy.

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you could be able to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is over $72,000 and you are comfortable doing your earnings without any help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide standard guidance.  You can only do your federal return with these forms. 
    3. Use an online tax preparation tax or service software: Tax prep software and online filing services are alternatives.  These options 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 financing to guide you through the completion of your types.  
    4. Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free help is typically limited based on earnings, and a few services cater to specific demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.  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 preferred approach of most taxpayers.  In fact, the IRS says it anticipated more than four tax returns to be submitted through tax return prep program.

Is e-filing really stable?

While e-filing is convenient, you could be worried about safety — particularly with so many data breaches.  But experts agree this isn’t an issue that should dissuade you from e-filing.

“In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your information in the email.”

Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set safety measures in place to keep your information safe.  “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says.  “All of this is routed over TLS encrypted links .”

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

Bottom line

For most taxpayers, it makes sense to e-file a yield since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options.  Just be sure that you use tax planning software from a trusted source, so you may ensure the information which you provide to transmit to the IRS will be kept secure.