Dave Ramsey House – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree on everything, but they are mostly on 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 popular as it is a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you save the IRS cash because its employees do not have to spend time manually processing your return. In return, you can find any refund you’re 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 the forms you might need in case you have a intricate tax situation?  Are there ever situations when you can’t e-file?  Let us look at the advantages of e-filing, and if it may be the very best filing choice for your needs.

If you are 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 has been received within one day of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 

    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.

  2. Reduced likelihood of errors: In accordance with the IRS, there’s around a 1% error rate on e-filed returns, compared with a 20% speed of errors on paper filings.  The IRS also provides more info on problems discovered on e-filed returns compared with paper returns.

  3. Simple payment process: If you owe the IRS money, it is simpler to pay at your convenience when you e-file.  It’s possible to submit returns early and pay afterwards if necessary, provided that you pay from the April 15 filing deadline.  And you can schedule electronic money transfers to 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 your checking account or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

  4. Digital storage of tax data: Submitting returns electronically means there’s a digital backup of your tax records.  If something happens to your paperwork, you’ll have a digital backup.

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

The way to e-file a tax return?

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you could have the ability 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 applications: Tax preparation software and online filing services are options.  These options are a simple way to complete and e-file your forms.  Some applications suppliers charge for their apps, Some are liberated.   The program asks you simple questions about your life and finances to guide you through the completion of your types.  
    3. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on income, and a few providers appeal to specific demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older.  The IRS maintains a record of licensed providers, but be aware this option is very likely to be the most costly one. 

Using online tax prep software is far and away the preferred approach of most taxpayers.  In fact, the IRS says it expected more than four in five tax returns to be filed through tax return prep program.

Is e-filing really secure?

While e-filing is convenient, you may worry about safety — especially with all these data breaches.  But experts agree that this is not an issue that should dissuade you by e-filing.

“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In fact, it may be more secure than paper filing since 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 put safety measures in place to keep your information safe.  “Trainers normally use IRS particular APIs that need token sessions,” Chow says.  “All of this can be routed over TLS encrypted links .”

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

Bottom line

For most taxpayers, it is sensible to e-file a yield because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just be certain to use tax preparation software from a trusted source, so you can ensure the information which you supply to transmit to the IRS will be kept protected.