Dave Ramsey Fixed Annuities – 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 on everything, but they are 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. 

In return, you could get any refund you are owed faster, especially in the event that you have it directly deposited to your bank account.

However, what about security?  And can electronic filing really give you access to all the forms you may need if you have a complex tax situation?  Are there ever situations when you can not e-file?  Let’s look at the benefits of e-filing, and if it may be the best filing option for your requirements.

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

  1. Quick affirmation your forms are received: The IRS will confirm a tax filing was received within 24 hours of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived . 
  2. Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or less.  Choosing direct deposit may also accelerate the refund process.

  3. Reduced likelihood of mistakes: In accordance with the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more information on problems discovered on e-filed yields compared with paper returns.

  4. Simple payment procedure: If you owe the IRS money, it’s easier to pay at your advantage when you e-file.  You can submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline.  Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from the checking or savings account, filing a credit card through a payment processor for a fee, 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 implies there’s an electronic backup of your tax documents.  If something happens to your paperwork, you will have an electronic backup.

The good news: Most taxpayers do opt to e-file and find those benefits — and the process of doing this is simple.

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

    1. Use 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.  The forms do the math for you and offer standard guidance.  You can only do your federal return with all these kinds. 
    2. Utilize an online tax preparation tax or service software: Tax preparation software and online filing services are options.  These options are an easy way to complete and e-file your own forms.  Some software suppliers charge for their programs, Some are liberated.   The software asks you simple questions about your life and financing to guide you through the completion of your types.  
    3. Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free aid is normally restricted based on income, and some providers appeal to specific demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they’re authorized IRS e-file providers. The IRS maintains a record of authorized providers, but be aware this option is likely to be the most costly one. 

Using online tax preparation software is far and away the favored approach of the majority of taxpayers.  In fact, the IRS says it anticipated more than four tax returns to be filed through tax return prep software.

Is e-filing really stable?

While e-filing is convenient, you may be worried about safety — especially with so many data breaches.  But experts agree that this is not an issue which should deter you from e-filing.

“In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your information in the email.”

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

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

Bottom line

For most 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 options.  Just be sure that you use tax planning software from a trusted source, so you may ensure the information which you supply to transmit to the IRS is going to be kept secure.