Dave Ramsey Foundations In Personal Finance – 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 mostly 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. 

And in return, you could get any refund you’re owed quicker, especially in the event that you have it directly deposited into your bank account.

But what about security?  And can electronic filing really 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 whether it may be the very best filing option for your requirements.

If you are 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 24 hours of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely. 
  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’ll receive your money in three weeks or less.  Choosing direct deposit may also speed up the refund procedure.

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

  4. Simple payment process: If you owe the IRS money, it is easier to pay at your advantage if you e-file.  You can submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline.  You also have the choice to pay your balance by using the IRS Direct pay service from the checking or savings account, submitting 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 documents.  If something happens to your paperwork, you’ll have an electronic backup.

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

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

The types do the math for you and provide standard guidance.  You can simply do your federal return with these forms. 

  • Use an internet tax preparation tax or service software: Tax preparation software and online filing services are alternatives.  These options are an easy way to finish and e-file your own forms.  Some applications providers charge for their apps, Some are free.   The software asks you simple questions about your own life and finances to steer you through the completion of your types.  
  • Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns.  However, eligibility for free help is normally restricted based on earnings, and a few services appeal to particular demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older.  The IRS maintains a record of licensed providers, but you should be aware this option is very likely to be the most costly one. 

    Using online tax preparation software is far and away the preferred approach of most 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 be worried about safety — particularly with so many data breaches.  But experts agree that this is not a problem that should dissuade you from 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 direction, marketing and sales 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 information in the email.”

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

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

    Bottom line

    For most taxpayers, it makes sense to e-file a yield because 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 make certain that you use tax preparation software from a trusted source, so that you can make certain the information you provide to transmit to the IRS will be kept protected.