Dave Ramsey For Dummies – Is It Best To E-File My Taxes?

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

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

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

When you e-file your federal income tax return, you conserve the IRS cash because its workers don’t need to spend time manually processing your return. In return, you could find any refund you’re owed faster, especially if you have it directly deposited into your bank accounts.

But what about safety?  And can electronic filing actually give you access to all the forms you might need in case you’ve got a complex tax situation?  Are there ever situations when you can not e-file?  Let’s look at the advantages of e-filing, and if it might be the best filing choice for your needs.

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

  1. Quick confirmation your forms have been received: The IRS will affirm a tax filing was received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived . 

    Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you are going to get your money in three weeks or less.  Choosing direct deposit may also speed up the refund procedure.

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

  3. Simple payment procedure: If you owe the IRS money, it’s simpler to pay at your advantage when you e-file.  You can submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline.  And you’re able to schedule electronic money transfers to easily 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 choice to pay your balance by making use of the IRS Direct pay service from your 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) will lead to interest and penalties.

  4. Digital storage of taxation data: Submitting returns electronically implies there’s an electronic copy of your tax documents.  So if something happens to your paperwork, you’ll have a digital backup.

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

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

  • Free File Fillable Types — If your income is more than $72,000 and you’re comfortable doing your taxes without any help, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer basic advice.  You can only do your federal return with these kinds. 
  • Use an internet tax preparation service or tax applications: Tax prep software and online filing services are options.  These choices are a simple way to complete and e-file your own forms.  Some software suppliers charge for their apps, Some are liberated.   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 help: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free help is normally restricted based on earnings, and some providers cater to particular demographic groups.  By way of example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are authorized 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. 

    Using online tax prep software is far and away the favored approach of most taxpayers.  Actually, the IRS says it anticipated over 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 security — particularly with all these data breaches.  But experts agree that this is not a problem that should dissuade you by e-filing.

    “E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your data in the mail.”

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

    It’s important to use a trustworthy service to help you record your taxes.  Chow advises not to e-file on a public computer or utilize an internet connection which isn’t confidential.

    Bottom line

    For many taxpayers, it makes sense to e-file a return since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just make certain to use tax preparation 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.