Dave Ramsey Home Affordability – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they’re mostly on precisely 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.  E-filing is a favorite as it’s a win-win for taxpayers and the IRS.

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

But what about safety?  And can digital filing actually give you access to all of the forms that you may need if you’ve got a intricate tax situation?  Are there situations when you can’t e-file?  Let us look at the benefits of e-filing, and whether it might be the best filing choice for your requirements.

If you are Considering e-filing, some of the advantages include:

  1. Quick confirmation your forms are 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 . 
  2. Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund.  With e-filing, you are going to receive your money in three weeks or not.  Choosing direct deposit may also speed up the refund procedure.

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

  4. Easy payment process: If you owe the IRS money, it’s easier to cover at your convenience when you e-file.  It’s possible to submit returns early and pay later if needed, as long as you pay by 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. You also have the choice to pay your balance by using the IRS Immediate pay service from the checking account or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) will result in interest and penalties.

  5. Digital storage of tax information: Submitting returns electronically implies there’s a digital copy of your tax records.  So if something happens to your paperwork, then you’ll have an electronic backup.

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

How to e-file a tax return?

  • Free File Fillable Forms — If your income is over $72,000 and you’re comfortable doing your earnings without any help, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard guidance.  You can simply do your federal return with all these forms. 
  • Utilize an online tax preparation tax or service applications: Tax prep software and online filing services are alternatives.  These options are a simple way to finish and e-file your forms.  Some software providers charge for their programs, Some are free.   The software asks you simple questions about your own life and financing to guide you through the completion of your forms.  
  • Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free aid is typically limited based on earnings, and some services appeal to specific demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.  The IRS maintains a database of licensed providers, but you should be aware this alternative is very likely to be the most costly one. 
  • Employing online tax prep software is far and away the preferred approach of most taxpayers.  Actually, the IRS says it anticipated 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 safety — particularly with so many data breaches.  But experts agree that this is not an issue that should deter you from e-filing.

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

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

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

    Bottom line

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