Dave Ramsey How Much Home Can I Afford – 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 about everything, but they’re mostly on precisely the same page in regards to e-filing individual income tax returns.

The majority of individual income tax returns submitted to the IRS are e-filed.  E-filing is a favorite because it is a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you save the IRS money because its workers don’t need to spend time manually processing your return. In return, you could find any refund you are owed quicker, especially if you have it directly deposited into your bank accounts.

However, what about security?  And can electronic filing actually give you access to all of the forms that you might need in case you have a intricate tax situation?  Are there ever situations when you can not e-file?  Let’s look at the benefits of e-filing, and whether it might be the best filing choice for your requirements.

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

  1. Quick affirmation your forms have been obtained: The IRS will affirm a tax filing was received within one day of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely. 
  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’ll get your money in 3 weeks or less.  Choosing direct deposit can also accelerate the refund procedure.

  3. Reduced chance of mistakes: According to the IRS, there is around a 1% error rate on e-filed yields, 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 yields.

  4. Easy payment process: If you owe the IRS money, it’s simpler to cover at your advantage if you e-file.  You can submit returns early and pay later if needed, provided that you pay by the April 15 filing deadline.  And you can schedule electronic funds 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 option to pay your balance by using the IRS Immediate pay service from the checking or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

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

The good news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing so is easy.

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may have the ability to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is more than $72,000 and you’re comfortable doing your taxes without assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer standard advice.  You can only do your federal return with all these forms. 
    3. Use an internet tax preparation service or tax applications: Tax prep software and online filing services are options.  These options are a simple way to finish and e-file your own forms.  Some software suppliers charge for their apps, Some are liberated.   The software asks you simple questions about your life and finances to guide you through the completion of your types.  
    4. Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free aid is normally restricted based on income, and some providers cater to particular demographic groups. 
    5. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are authorized IRS e-file providers. The IRS maintains a database of licensed providers, but you should 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 the majority of 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 stable?

      While e-filing is convenient, you could worry about safety — particularly with so many data breaches.  But experts agree that this is not an issue that should deter you by e-filing.

      “In fact, it may be more secure than paper filing as you’re sending your private 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 security measures in place to keep your data secure.  “Vendors typically utilize IRS specific APIs that need ab sessions,” Chow says.  “All of this is routed over TLS encrypted connections.”

      It’s 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 which isn’t confidential.

      Bottom line

      For many taxpayers, it makes sense 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 options.  Just be sure that you use tax planning software from a dependable source, so that you can ensure the information which you provide to transmit to the IRS is going to be kept secure.