Dave Ramsey Foundations In Personal Finance Homeschool – Is It Best To E-File My Taxes?

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

Americans and the IRS may 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 filed to the IRS are e-filed. 

When you e-file your federal income tax return, you conserve the IRS cash because its employees don’t need to spend time manually processing your return. And in return, you can find any refund you are owed faster, particularly in the event that 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 you might need if you’ve got 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 might be the best filing choice for your needs.

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

  1. Quick affirmation your forms have been received: The IRS will confirm a tax filing was received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment 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 can also speed up the refund process.

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

  4. Simple payment procedure: If you owe the IRS money, it is easier to cover at your advantage when you e-file.  It’s possible to submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline.  Additionally you have the option to pay your balance by making use of the IRS Immediate pay service from your checking or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order. 

  5. Digital storage of tax data: Submitting returns electronically means there’s a digital copy of your tax records.  So 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 benefits — and the process of doing so is easy.

The way to e-file a tax return?

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

The types do the math for you and offer basic advice.  You can simply do your federal return with all these kinds. 

  • Use an online tax preparation service or tax applications: Tax preparation software and online filing services are alternatives.  These choices are a simple way to complete and e-file your own forms.  Some software providers charge for their apps, Some are liberated.   The software asks you simple questions about your own life and financing to steer you through the completion of your types.  
  • Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free aid is normally restricted based on earnings, and some services cater to particular demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. 
  • 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. 

    Using online tax prep software is far and away the favored approach of the majority of taxpayers.  In fact, the IRS says it expected over four in five tax returns to be submitted through tax return prep program.

    Is e-filing really secure?

    While e-filing is convenient, you could worry about safety — particularly with so many data breaches.  But experts agree this isn’t a problem that should dissuade you from e-filing.

    “In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your data in the email.”

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

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

    Bottom line

    For most taxpayers, it is sensible to e-file a return since it is the most convenient way to submit 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 that you may make certain the information which you supply to transmit to the IRS is going to be kept secure.