Dave Ramsey Interest Calculator – 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 about everything, but they’re largely on the exact same page in regards to e-filing individual income tax returns.

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

In return, you can get any refund you’re owed faster, particularly in the event that you have it directly deposited to your bank accounts.

However, what about security?  And can electronic filing actually give you access to all the forms you may need if you’ve got 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 very best filing option for your requirements.

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

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

    Timely refunds: When you publish a paper filing, it may take six to eight months to receive a tax refund.  With e-filing, you’ll receive your money in three weeks or not.  Choosing direct deposit may also accelerate the refund process.

  2. Reduced likelihood of mistakes: According to the IRS, there’s approximately a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings.  The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.

  3. Simple payment procedure: If you owe the IRS money, it is easier to cover at your advantage if you e-file.  You can submit returns early and pay later if necessary, as long as you pay by the April 15 filing deadline.  And you’re able to schedule electronic money 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. Additionally you have the choice to pay your balance by using the IRS Immediate pay service from your checking account or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order. 

  4. Digital storage of taxation data: Submitting returns electronically means there is a digital backup of your tax records.  If something happens to your paperwork, then you will have a digital backup.

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may be able to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is over $72,000 and you’re 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 advice.  You can only do your federal return with these forms. 
    3. Utilize an online tax preparation service or tax software: Tax preparation software and online filing services are alternatives.  These options are an easy way to finish and e-file your own forms.  Some software providers charge for their apps, Some are liberated.   The program asks you simple questions about your life and financing to guide you through the completion of your forms.  
    4. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free help is typically limited based on earnings, and a few services appeal to particular demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.  The IRS maintains a database of licensed providers, but be aware this option is likely to be the most costly one. 

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

Is e-filing really secure?

While e-filing is suitable, you may worry about security — especially with all these data breaches.  But experts agree this isn’t a problem that should deter you from e-filing.

“In actuality, it may 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 mail.”

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

It is very important to use a trusted service to assist you record your taxes.  Chow advises not to e-file on a public computer or utilize an internet connection which is not confidential.

Bottom line

For most taxpayers, it makes sense to e-file a return 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 make certain to use tax preparation software from a dependable source, so you may ensure the information which you supply to transmit to the IRS is going to be kept protected.