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

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

Americans and the IRS may not agree on everything, but they are 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. 

If you e-file your federal income tax return, you save the IRS cash because its employees don’t need to spend time manually processing your return. In return, you can get any refund you are owed quicker, particularly if you have it directly deposited to your bank account.

But what about safety?  And can digital filing really provide you access to all of the forms that you might need if you have a complex tax situation?  Are there ever situations when you can not e-file?  Let’s look at the benefits of e-filing, and if it may be the very best filing option for your requirements.

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

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

  3. Reduced chance of errors: 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 info on problems discovered on e-filed yields compared with paper returns.

  4. Simple payment procedure: If you owe the IRS money, it is easier to pay at your advantage when you e-file.  You can submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline.  You also have the choice to pay your balance by using the IRS Immediate pay service from the checking or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) can lead to interest and penalties.

  5. Digital storage of tax data: Submitting returns electronically means there’s an electronic copy of your tax records.  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 advantages — and the practice of doing this is simple.

The way to e-file a tax return?

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

  • Free File Fillable Types — If your income is more than $72,000 and you’re comfortable doing your taxes without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer standard advice.  You can simply do your federal return with these kinds. 
  • Use an online tax preparation service or tax software: Tax prep software and online filing services are options.  These choices are an easy way to finish and e-file your own forms.  Some software providers charge for their apps, Some are free.   The software asks you simple questions about your life and finances to steer you through the completion of your types.  
  • Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free help is typically limited based on income, and some services cater to specific demographic groups. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a database of licensed providers, but be aware this alternative is likely to be the most costly one. 
  • Using online tax preparation software is far and away the preferred approach of most taxpayers.  In fact, the IRS says it expected more than four tax returns to be filed through tax return prep software.

    Is e-filing really secure?

    While e-filing is convenient, you could worry about safety — especially with so many data breaches.  But experts agree this is not a problem which should dissuade you by e-filing.

    “In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your data in the email.”

    Dennis Chow, vice president of information security at SCIS Security, explains the IRS has put safety measures in place to keep your information secure.  “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says.  “All this is routed over TLS encrypted links .”

    It is very important to use a trustworthy service to assist you file your taxes.  Chow advises not to e-file on a computer or use an internet connection that is not private.

    Bottom line

    For many taxpayers, it makes sense to e-file a yield because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just be sure that you use tax preparation software from a trusted source, so you may ensure the information which you provide to transmit to the IRS is going to be kept protected.