Dave Ramsey Listen Live – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree about everything, but they are mostly on the 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. 

And in return, you can find any refund you are owed faster, especially in the event that you have it directly deposited to your bank account.

However, what about safety?  And can electronic filing really give you access to all of the forms that you might need in case you have a complex tax situation?  Are there situations when you can not e-file?  Let’s look at the advantages of e-filing, and if it may be the very best filing choice for your needs.

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

  1. Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was received within 24 hours of digital submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 

    Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund.  With e-filing, you’ll receive your money in 3 weeks or not.  Choosing direct deposit can also speed up the refund process.

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

  3. Easy payment procedure: If you owe the IRS money, it’s easier to cover at your convenience 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 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. You also have the choice to pay your balance by using the IRS Direct pay service from the checking account or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order. 

  4. Digital storage of taxation information: Submitting returns electronically means there’s an electronic copy of your tax documents.  If something happens to your paperwork, then you’ll have a digital backup.

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

You have four options for filing an electronically filed tax return to the IRS.

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program.  The forms do the math for you and provide basic guidance.  You can only do your federal return with all these kinds. 
    2. Utilize an internet tax preparation tax or service applications: Tax prep software and online filing services are alternatives.  These choices are an easy way to complete and e-file your forms.  Some software suppliers charge for their programs, Some are free.   The program asks you simple questions about your own life and financing to steer you through the completion of your types.  
    3. Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free help is typically limited based on income, and some providers cater to particular demographic groups.  The IRS maintains a record of authorized providers, but you should be aware this option is likely to be the most costly one. 

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

Is e-filing really secure?

While e-filing is suitable, you could be worried about safety — particularly with so many data breaches.  But experts agree that this isn’t a problem which should deter you by e-filing.

“In fact, it may be more secure than paper filing since 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 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 this is routed over TLS encrypted connections.”

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

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 choices.  Just be sure to use tax planning software from a trusted source, so that you may make certain the information which you provide to transmit to the IRS will be kept protected.