Dave Ramsey Foundations In Personal Finance Chapter 1 Test Answers – Is It Best To E-File My Taxes?

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

Americans and the IRS may not agree about everything, but they are largely on precisely the 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. 

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

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

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

  1. Quick confirmation your forms are obtained: The IRS will affirm a tax filing has been received within one day of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it may take six to eight months to be given a tax refund.  With e-filing, you’ll receive your money in 3 weeks or not.  Choosing direct deposit may also accelerate the refund procedure.

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

  4. Easy payment process: If you owe the IRS money, it is easier to cover at your advantage if you e-file.  You can submit returns early and pay afterwards if necessary, provided that 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, provided that the IRS receives your payment by Tax Day. Additionally you have the option 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. 

  5. Digital storage of tax data: Submitting returns electronically means there is an electronic backup of your tax documents.  So if something happens to your paperwork, then you’ll have a digital backup.

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

The way to e-file a tax return?

    1. Use IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program.  The types do the math for you and provide standard guidance.  You can only do your federal return with all these forms. 
    2. Use an online tax preparation service or tax software: Tax prep software and online filing services are options.  These choices are a simple way to finish and e-file your forms.  Some software suppliers charge for their apps, Some are liberated.   The program asks you simple questions about your life and financing to steer you through the completion of your forms.  
    3. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free help is typically limited based on earnings, and a few services appeal to specific demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a record of licensed providers, but be aware this option is likely to be the most costly one. 

      Employing online tax prep software is far and away the preferred approach of the majority of taxpayers.  Actually, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep program.

      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 this isn’t an issue that should dissuade you by e-filing.

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

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

      It is very important to use 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 which is not confidential.

      Bottom line

      For many 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 choices.  Just be certain that you use tax preparation software from a dependable source, so you can ensure the information you provide to transmit to the IRS is going to be kept secure.