Dave Ramsey Live – 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.

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

When you e-file your federal income tax return, you conserve the IRS cash because its employees don’t need to spend time manually processing your return. In return, you can get any refund you’re owed faster, particularly in the event that you have it directly deposited into your bank accounts.

But what about security?  And can digital filing really give you access to all the forms you might need if you have a complex tax situation?  Are there ever situations when you can’t e-file?  Let us look at the benefits of e-filing, and if it may be the very best filing choice for your needs.

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

  1. Quick confirmation your forms are obtained: The IRS will affirm a tax filing has been received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 

    Timely refunds: When you publish a paper filing, it may take six to eight weeks to be given a tax refund.  With e-filing, you are going to get your money in three weeks or less.  Choosing direct deposit may also accelerate the refund process.

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

  3. Simple payment procedure: If you owe the IRS money, it’s easier to pay at your convenience if you e-file.  It’s possible to submit returns early and pay afterwards if necessary, as long as you pay from the April 15 filing deadline.  You also have the option to pay your balance by using the IRS Direct pay service from your checking 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 tax data: Submitting returns electronically means there is a digital backup of your tax records.  So if something happens to your paperwork, you’ll have a digital backup.

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

How to e-file a tax return?

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could be able 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 earnings 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 all these kinds. 
    3. Utilize an online tax preparation service or tax applications: Tax prep software and online filing services are alternatives.  These choices are a simple way to complete 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 financing to guide you through the completion of your types.  
    4. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on income, and a few services appeal to particular demographic groups. 
    5. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re licensed IRS e-file providers. The IRS maintains a database of licensed providers, but you should 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.  In fact, the IRS says it anticipated over four in five tax returns to be filed through tax return prep software.

      Is e-filing really secure?

      While e-filing is suitable, you may worry about safety — especially with so many data breaches.  But experts agree this isn’t an issue 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 leadership, advertising and revenue at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your information in the mail.”

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

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

      Bottom line

      For many taxpayers, it is sensible to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just make certain to use tax preparation software from a dependable source, so that you may make certain the information which you provide to transmit to the IRS will be kept secure.