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

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

Americans and the IRS might not agree about everything, but they’re largely on the same page in regards to e-filing individual income tax returns.

Nearly all individual income tax returns submitted to the IRS are e-filed. 

When you e-file your federal income tax return, you conserve the IRS cash because its employees don’t have to spend time manually processing your return. In return, you can find any refund you are owed quicker, especially if you have it directly deposited into your bank account.

However, what about security?  And can digital filing actually provide you access to all of the forms you may need in case you have 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 best filing option for your requirements.

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

  1. Quick confirmation your forms have been received: 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 that your forms have arrived . 
  2. Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you are going to receive your money in 3 weeks or less.  Choosing direct deposit may also speed up the refund procedure.

  3. Reduced chance of errors: In accordance with the IRS, there’s 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 issues discovered on e-filed yields compared with paper returns.

  4. Simple payment process: If you owe the IRS money, it is easier to pay at your convenience if you e-file.  It’s possible to submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline.  And you can schedule electronic funds transfers to send the IRS what you owe on a date of your choosing again, provided that the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by using the IRS Direct pay service from your checking or savings account, filing 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 data: Submitting returns electronically means there is an electronic copy of your tax documents.  So if something happens to your paperwork, then you will have an electronic backup.

The fantastic news: Most taxpayers do decide to e-file and find those benefits — and the process of doing so is simple.

How to e-file a tax return?

    1. Use IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program.  The types do the math for you and provide basic advice.  You can only do your federal return with these kinds. 
    2. Use an online tax preparation tax or service applications: Tax prep software and online filing services are options.  These choices are a simple way to finish and e-file your forms.  Some software suppliers 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 types.  
    3. Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  But eligibility for free help is normally restricted based on income, and some services appeal to specific demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re licensed IRS e-file providers. The IRS maintains a record of authorized providers, but 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 the majority of taxpayers.  Actually, the IRS says it expected more than four in five tax returns to be filed through tax return prep software.

      Is e-filing really stable?

      While e-filing is convenient, you may be worried about security — particularly with all these data breaches.  But experts agree this is not an issue which should dissuade you by e-filing.

      “E-filing a tax return has turned out to be a very 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 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 information security at SCIS Security, explains the IRS has put safety measures in place to keep your data secure.  “Trainers normally use IRS particular APIs that need token sessions,” Chow says.  “All of this is routed over TLS encrypted connections.”

      It is important to employ a trusted service to assist you file your taxes.  Chow advises not to e-file on a public computer or utilize an online connection which isn’t private.

      Bottom line

      For most taxpayers, it makes sense to e-file a yield since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just be certain to use tax preparation software from a dependable source, so you may make certain the information which you supply to transmit to the IRS will be kept protected.