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

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

Americans and the IRS might not agree on everything, but they’re largely on the exact same page when it comes to e-filing individual income tax returns.

Nearly all individual income tax returns submitted to the IRS are e-filed.  E-filing is popular as it’s a win-win for taxpayers and the IRS.

If 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 could get any refund you’re owed faster, particularly if you have it directly deposited into your bank account.

However, what about security?  And can digital filing really give you access to all the forms you might need if you’ve got a complex tax situation?  Are there situations when you can not e-file?  Let us look at the benefits of e-filing, and if it may be the best filing option for your requirements.

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

  1. Quick affirmation your forms have been obtained: The IRS will affirm a tax filing has been received within one day of digital submission.  For paper filers, the IRS doesn’t 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 accelerate the refund procedure.

  3. Reduced likelihood of mistakes: According to the IRS, there’s 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 yields.

  4. Easy payment process: If you owe the IRS money, it is simpler 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.  Additionally you have the choice to pay your balance by making use of 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 following 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 a digital backup of your tax documents.  If something happens to your paperwork, you will have an electronic backup.

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

How to e-file a tax return?

You have four options 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. 
    2. Free File Fillable Types — If your income is more than $72,000 and you are comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide standard guidance.  You can only do your federal return with these kinds. 
    3. Use an internet tax preparation tax or service applications: Tax prep software and online filing services are options.  These choices are a simple way to complete and e-file your own forms.  Some software providers charge for their programs, Some are liberated.   The software asks you simple questions about your life and financing to steer you through the completion of your forms.  
    4. Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free aid is typically limited based on income, and some services cater to specific demographic groups. 
    5. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a record of licensed providers, but be aware this option is likely to be the most costly one. 

      Using online tax preparation software is far and away the favored 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 secure?

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

      “In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted system as opposed to exposing your data in the mail.”

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

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

      Bottom line

      For most taxpayers, it makes sense to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options.  Just make sure that you use tax planning software from a trusted source, so that you can make certain the information which you provide to transmit to the IRS will be kept protected.