Dave Ramsey Melaleuca – Is It Best To E-File My Taxes?

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

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

The majority of individual income tax returns filed to the IRS are e-filed.  E-filing is a favorite because it’s a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you conserve the IRS money because its employees do not need to spend time manually processing your return. In return, you can get any refund you are owed quicker, especially in the event that you have it directly deposited to your bank accounts.

But what about security?  And can electronic filing really give you access to all the forms that you might need in case you’ve got a intricate tax situation?  Are there situations when you can’t e-file?  Let’s look at the benefits of e-filing, and if it might be the best filing option for your needs.

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

  1. Quick affirmation your forms are received: The IRS will affirm a tax filing has been received within one day of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely. 
  2. 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 not.  Choosing direct deposit can also speed up the refund procedure.

  3. Reduced likelihood of mistakes: In accordance with the IRS, there’s around a 1 percent error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more information on problems discovered on e-filed returns compared with paper yields.

  4. Simple 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 from the April 15 filing deadline.  You also have the choice to pay your balance by making use of the IRS Immediate pay service from the checking or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) will lead to penalties and interest.

  5. Digital storage of taxation information: Submitting returns electronically implies there is an electronic copy of your tax documents.  So if something happens to your paperwork, you’ll have a digital backup.

The fantastic news: Most taxpayers do decide to e-file and find those benefits — and the practice of doing this is easy.

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

    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. 
    2. Free File Fillable Forms — If your income is over $72,000 and you’re comfortable doing your earnings without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard advice.  You can only do your federal return with these kinds. 
    3. Use an online tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  These choices are an easy way to finish and e-file your own forms.  Some software providers charge for their programs, Some are liberated.   The software asks you simple questions about your own life and finances to guide you through the completion of your forms.  
    4. Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free aid is typically limited based on earnings, and some services appeal to specific demographic groups.  The IRS maintains a record of authorized providers, but you should be aware this alternative is very likely to be the most costly one. 

Using online tax prep software is far and away the preferred approach of most taxpayers.  In fact, the IRS says it expected more than four in five tax returns to be filed through tax return prep program.

Is e-filing really secure?

While e-filing is suitable, you could be worried about security — especially with so many data breaches.  But experts agree this is not an issue that should deter you by e-filing.

“E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your data in the email.”

Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set security measures in place to keep your data safe.  “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says.  “All of this can be routed over TLS encrypted connections”

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

Bottom line

For most taxpayers, it is sensible to e-file a return since 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 certain that you use tax planning software from a trusted source, so that you may make certain the information you provide to transmit to the IRS is going to be kept protected.