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

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

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

The majority of individual income tax returns submitted to the IRS are e-filed. 

In return, you can find any refund you are owed quicker, especially if you have it directly deposited to your bank account.

But what about safety?  And can electronic filing actually provide you access to all the forms you might need if you’ve got a intricate tax situation?  Are there situations when you can not e-file?  Let us look at the advantages of e-filing, and whether it might be the best filing choice for your requirements.

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

  1. Quick affirmation your forms are received: The IRS will affirm a tax filing was received within one day of electronic submission.  For paper filers, the IRS does not 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 be given a tax refund.  With e-filing, you’ll receive your money in three weeks or less.  Choosing direct deposit can also speed up the refund process.

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

  4. Easy payment process: If you owe the IRS money, it is easier to cover at your convenience if you e-file.  You can submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline.  Additionally you have the option to pay your balance by using the IRS Direct 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. 

  5. Digital storage of tax information: Submitting returns electronically means there’s a digital backup of your tax documents.  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. Use 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 forms do the math for you and offer standard advice.  You can only do your federal return with 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 finish and e-file your forms.  Some software suppliers charge for their programs, Some are free.   The software asks you simple questions about your own life and finances to steer you through the completion of your types.  
    3. Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free help is typically limited based on earnings, and a few services cater to specific demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a database of authorized providers, but you should be aware this alternative is likely to be the most costly one. 

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

Is e-filing really stable?

While e-filing is suitable, you may worry about security — especially with all these data breaches.  But experts agree that this is not a problem that should deter 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, advertising and revenue at LegalShield. “In fact, 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 email.”

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

It’s important to use a trustworthy service to help you file your taxes.  Chow advises to not e-file on a public computer or use an online connection which isn’t private.

Bottom line

For many 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 easy payment choices.  Just be certain to use tax planning software from a trusted source, so you can make certain the information which you supply to transmit to the IRS is going to be kept protected.