Dave Ramsey For College Students – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree about everything, but they are largely on the exact same page when it comes to e-filing individual income tax returns.

The majority of individual income tax returns filed to the IRS are e-filed. 

In return, you could find any refund you’re owed faster, particularly in the event that you have it directly deposited to your bank accounts.

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

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

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

  3. Reduced chance of mistakes: According to the IRS, there is approximately a 1 percent error rate on e-filed yields, compared with a 20% rate of errors on paper filings.  The IRS also provides more info 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 cover at your convenience when 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.  And you can schedule electronic money transfers to easily 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 choice to pay your balance by making use of the IRS Immediate pay service from the checking 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) will lead to penalties and interest.

  5. Digital storage of tax information: Submitting returns electronically means there’s a digital copy of your tax documents.  So if something happens to your paperwork, you’ll have a digital backup.

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

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

    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 standard advice.  You can simply do your federal return with these kinds. 
    2. Use an online tax preparation tax or service software: Tax preparation software and online filing services are alternatives.  These choices are an easy way to complete and e-file your forms.  Some applications providers charge for their apps, Some are free.   The program asks you simple questions about your own life and finances to steer you through the completion of your types.  
    3. Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free aid is typically limited based on income, and a few providers appeal to particular demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a database of licensed providers, but be aware this alternative 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 expected more than four tax returns to be submitted through tax return prep software.

Is e-filing really stable?

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

“In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your information in the mail.”

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

It is very important to employ a trusted service that will assist you file your taxes.  Chow advises not to e-file on a public computer or utilize an online connection that isn’t confidential.

Bottom line

For many taxpayers, it makes sense to e-file a yield since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just make certain that you use tax preparation software from a trusted source, so you can ensure the information you supply to transmit to the IRS is going to be kept secure.