Dave Ramsey Financial Peace Steps – What to Consider When Filing My Taxes Online

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

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

In return, you can find any refund you are owed faster, particularly if you have it directly deposited into your bank accounts.

However, what about security?  And can electronic filing really give you access to all of the forms that you may need in case you have a intricate tax situation?  Are there ever situations when you can’t e-file?  Let us look at the advantages of e-filing, and whether it might be the best filing option for your requirements.

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

  1. Quick affirmation your forms have been received: The IRS will confirm a tax filing was received within 24 hours of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you’ll receive your money in three weeks or not.  Choosing direct deposit may also speed up the refund procedure.

  3. Reduced chance of errors: According to the IRS, there is approximately a 1% error rate on e-filed yields, compared with a 20% rate of errors on paper filings.  The IRS also provides more information on problems discovered on e-filed yields compared with paper yields.

  4. Easy payment process: If you owe the IRS money, it’s simpler to pay at your advantage if you e-file.  You can submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline.  And you can schedule electronic funds transfers to send the IRS what you owe on a date of your choosing — again, as long as the IRS receives your payment by Tax Day. Additionally you have the option to pay your balance by using the IRS Immediate pay service from your checking account or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) can result in penalties and interest.

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

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

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you could have the ability to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is more than $72,000 and you’re comfortable doing your earnings without any assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic guidance.  You can only do your federal return with these forms. 
    3. Utilize an internet 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 software suppliers charge for their programs, Some are free.   The program asks you simple questions about your own life and financing to steer you through the completion of your types.  
    4. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free help is typically limited based on income, and a few services cater to specific demographic groups.  The IRS maintains a record 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 preferred approach of the majority of taxpayers.  In fact, the IRS says it expected more than four in five tax returns to be submitted through tax return prep software.

      Is e-filing really secure?

      While e-filing is suitable, you may worry about security — particularly with so many data breaches.  But experts agree this isn’t an issue that should dissuade you from e-filing.

      “E-filing a tax return has turned out to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product direction, advertising and sales at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your information in the email.”

      Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has put security measures in place to keep your data safe.  “Trainers normally use IRS specific APIs that need token sessions,” Chow says.  “All this is routed over TLS encrypted links .”

      It’s very important to use a trusted service to help you file your taxes.  Chow advises not to e-file on a computer or use an online connection that is not confidential.

      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 easy payment options.  Just be sure to use tax planning software from a trusted source, so you can ensure the information which you provide to transmit to the IRS will be kept secure.