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

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

Americans and the IRS may not agree on everything, but they are mostly on the same page when it comes to e-filing individual income tax returns.

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

When you e-file your federal income tax return, you save the IRS cash because its workers do not need to spend time manually processing your return. In return, you could find any refund you’re owed quicker, especially if you have it directly deposited to your bank accounts.

But what about safety?  And can electronic filing actually provide you access to all the forms you might need if you have a intricate tax situation?  Are there ever situations when you can not e-file?  Let us look at the benefits of e-filing, and if it might be the best filing option for your needs.

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

  1. Quick confirmation your forms are received: The IRS will affirm a tax filing has been received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived . 

    Timely refunds: When you submit a paper filing, it may 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 accelerate the refund process.

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

  3. Simple payment process: If you owe the IRS money, it is simpler to cover at your advantage when you e-file.  You can submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline.  You also have the choice to pay your balance by using the IRS Immediate pay service from your checking or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order. 

  4. Digital storage of taxation information: Submitting returns electronically implies there’s an electronic backup of your tax records.  So if something happens to your paperwork, then you will have an electronic backup.

The fantastic news: Most taxpayers do opt to e-file and find those benefits — and the practice of doing this is easy.

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

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

  • Use an online tax preparation tax or service applications: Tax prep software and online filing services are alternatives.  These choices are an easy way to finish and e-file your own forms.  Some software providers charge for their programs, Some are liberated.   The program asks you simple questions about your own life and finances to guide you through the completion of your forms.  
  • 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 typically limited based on earnings, and a few services cater to specific 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, including CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a record of authorized providers, but be aware this option is very likely to be the most costly one. 

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

    Is e-filing really stable?

    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 deter you from e-filing.

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

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

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

    Bottom line

    For many taxpayers, it makes sense to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make certain to use tax preparation software from a dependable source, so that you can ensure the information you provide to transmit to the IRS is going to be kept secure.