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

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

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

Nearly all individual income tax returns filed to the IRS are e-filed.  E-filing is a favorite because it is a win-win for taxpayers and the IRS.

And in return, you could find any refund you are owed quicker, particularly if you have it directly deposited into your bank account.

However, what about safety?  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 not e-file?  Let’s look at the benefits of e-filing, and whether it may be the best filing choice for your requirements.

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

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

  3. Reduced likelihood of mistakes: According to the IRS, there’s around a 1 percent error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more info on problems discovered on e-filed yields compared with paper yields.

  4. Easy payment process: If you owe the IRS money, it is easier to pay at your advantage if you e-file.  It’s possible to submit returns early and pay later if necessary, as long as you pay by the April 15 filing deadline.  Additionally you have the option to pay your balance by using the IRS Immediate pay service from the checking account or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

  5. Digital storage of tax information: Submitting returns electronically implies there’s a digital backup of your tax records.  If something happens to your paperwork, then you will have a digital backup.

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you may have the ability to use the IRS Free File program.  The types do the math for you and offer basic advice.  You can only do your federal return with all these forms. 
    2. Utilize an internet 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 providers charge for their apps, Some are liberated.   The software asks you simple questions about your life and financing to guide you through the completion of your forms.  
    3. Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free help is typically limited based on income, and some services appeal to particular demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. 
    4. 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 database of authorized providers, but you should be aware this option is very likely to be the most costly one. 

      Using online tax prep software is far and away the preferred approach of most taxpayers.  Actually, the IRS says it expected more than four tax returns to be filed through tax return prep software.

      Is e-filing really secure?

      While e-filing is suitable, you may worry about safety — especially with all these data breaches.  But experts agree this isn’t an issue that should deter you from 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 may be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your data in the mail.”

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

      It’s important to employ a trustworthy service that will help you record your taxes.  Chow advises to not e-file on a computer or utilize an internet connection that is not confidential.

      Bottom line

      For most taxpayers, it is sensible to e-file a return since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just be certain that you use tax preparation software from a trusted source, so that you may make certain the information you provide to transmit to the IRS will be kept protected.