Dave Ramsey Every Dollar Tutorial – Is It Best To E-File My Taxes?

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

Americans and the IRS may not agree about everything, but they’re largely on the exact 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. 

If you e-file your federal income tax return, you conserve the IRS money because its workers don’t have to spend time manually processing your return. And in return, you could get any refund you’re owed quicker, particularly if you have it directly deposited into your bank accounts.

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

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

  1. Quick affirmation your forms are received: The IRS will affirm a tax filing has been received within 24 hours of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely. 
  2. Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund.  With e-filing, you are going to receive your money in 3 weeks or less.  Choosing direct deposit may also speed up the refund procedure.

  3. 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% speed of errors on paper filings.  The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.

  4. Easy payment process: If you owe the IRS money, it’s simpler to cover at your convenience when you e-file.  It’s possible to submit returns early and pay later if necessary, provided that you pay by the April 15 filing deadline.  And you’re able to schedule electronic funds transfers to 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 using the IRS Immediate pay service from your checking or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order. 

  5. Digital storage of taxation data: Submitting returns electronically implies there’s a digital backup of your tax documents.  If something happens to your paperwork, then you’ll have a digital backup.

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

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

The types do the math for you and provide basic guidance.  You can simply do your federal return with all these forms. 

  • Utilize an online tax preparation service or tax applications: Tax preparation software and online filing services are options.  These choices are an easy way to finish and e-file your forms.  Some software suppliers charge for their apps, Some are free.   The program asks you simple questions about your own life and finances to guide you through the completion of your types.  
  • Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on income, and a few services cater to particular demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a database of licensed providers, but be aware this option is likely to be the most costly one. 

    Using online tax prep software is far and away the favored approach of most taxpayers.  In fact, the IRS says it expected over four in five tax returns to be submitted through tax return prep software.

    Is e-filing really secure?

    While e-filing is convenient, you could be worried about safety — particularly with all these data breaches.  But experts agree that this isn’t a problem that should dissuade you from e-filing.

    “In fact, it may be more secure than paper filing as 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, explains that the IRS has set security measures in place to keep your information secure.  “Vendors typically utilize IRS particular APIs that require token sessions,” Chow says.  “All this can be routed over TLS encrypted links “

    It is important to use a trustworthy service to assist you file your taxes.  Chow advises not to e-file on a computer or utilize an internet connection that is not private.

    Bottom line

    For many taxpayers, it makes sense to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just be certain to use tax planning software from a dependable source, so you may ensure the information which you provide to transmit to the IRS is going to be kept protected.