Dave Ramsey Forum – What to Consider When Filing My Taxes Online

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

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

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

When you e-file your federal income tax return, you conserve the IRS money because its workers do not need to spend time manually processing your return. In return, you can get any refund you are owed faster, especially in the event that you have it directly deposited to your bank accounts.

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

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

  1. Quick confirmation your forms have been obtained: The IRS will affirm a tax filing has been received within one day of digital submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 

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

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

  3. Simple payment procedure: If you owe the IRS money, it is easier to pay at your convenience when you e-file.  You can submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline.  And you’re able to schedule electronic funds 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. Additionally you have the choice to pay your balance by making use of the IRS Immediate pay service from your checking account or savings account, submitting 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 result in interest and penalties.

  4. Digital storage of tax information: Submitting returns electronically implies there’s an electronic copy of your tax documents.  If something happens to your paperwork, you will have a digital backup.

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

The way to e-file a tax return?

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

The types do the math for you and offer basic advice.  You can only do your federal return with these forms. 

  • Use an online tax preparation tax or service software: Tax preparation software and online filing services are options.  These choices are an easy way to finish and e-file your own forms.  Some software suppliers charge for their apps, Some are liberated.   The program asks you simple questions about your own 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 yields.  But eligibility for free aid is normally restricted based on income, and some services appeal to particular demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.  The IRS maintains a record of licensed providers, but be aware this alternative is very likely to be the most costly one. 
  • Employing online tax prep software is far and away the favored approach of most taxpayers.  Actually, the IRS says it expected over four in five tax returns to be submitted through tax return prep software.

    Is e-filing really secure?

    While e-filing is convenient, you may worry about security — especially with so many data breaches.  But experts agree that this isn’t a problem which should deter you by e-filing.

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

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

    It’s very important to employ a trusted service that will assist you file your taxes.  Chow advises to not e-file on a computer or utilize an internet connection that is not private.

    Bottom line

    For many taxpayers, it is sensible to e-file a return because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just make sure that you use tax planning software from a trusted source, so you may make certain the information which you provide to transmit to the IRS is going to be kept secure.