Dave Ramsey Financial Coach Webinar – 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.

Nearly all individual income tax returns filed to the IRS are e-filed. 

And in return, you can get any refund you are owed faster, particularly if you have it directly deposited to your bank accounts.

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

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

  1. Quick affirmation your forms have been received: The IRS will affirm a tax filing has been received within one day of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived . 

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

  2. Reduced likelihood of errors: In accordance with the IRS, there’s 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 issues discovered on e-filed returns compared with paper yields.

  3. Simple payment procedure: If you owe the IRS money, it’s simpler to pay at your convenience when you e-file.  It’s possible to submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline.  Additionally you have the option to pay your balance by making use of the IRS Direct pay service from your checking or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

  4. Digital storage of taxation data: Submitting returns electronically means there is a digital copy of your tax documents.  If something happens to your paperwork, then you will have an electronic backup.

The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the practice of doing this is easy.

The way to e-file a tax return?

  • Free File Fillable Forms — If your income is more than $72,000 and you’re comfortable doing your taxes without assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer standard guidance.  You can simply do your federal return with all these kinds. 
  • Use an online tax preparation service or tax applications: Tax preparation software and online filing services are alternatives.  These choices are a simple way to finish 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 finances to steer you through the completion of your types.  
  • 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 income, and some services appeal to particular demographic groups. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they’re licensed IRS e-file providers. The IRS maintains a record of licensed 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 favored approach of the majority of taxpayers.  Actually, the IRS says it anticipated more than four tax returns to be filed through tax return prep software.

    Is e-filing really secure?

    While e-filing is suitable, you could be worried about safety — especially with all these data breaches.  But experts agree that this isn’t an issue which should deter you by e-filing.

    “E-filing a tax return has turned out 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 can be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your information in the mail.”

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

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

    Bottom line

    For many taxpayers, it makes sense to e-file a yield 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 that you use tax planning software from a dependable source, so you may make certain the information which you supply to transmit to the IRS is going to be kept secure.