Dave Ramsey Mortgage Advice – What to Consider When Filing My Taxes Online

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

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

The majority of individual income tax returns submitted to the IRS are e-filed.  E-filing is a favorite as 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 workers don’t need to spend time manually processing your return. And in return, you could find any refund you are owed quicker, especially in the event that you have it directly deposited into your bank account.

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

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

  1. Quick confirmation your forms are obtained: The IRS will confirm a tax filing was received within 24 hours of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you’ll receive your money in three weeks or not.  Choosing direct deposit can also accelerate the refund process.

  3. Reduced chance of mistakes: In accordance with the IRS, there is around a 1 percent error rate on e-filed yields, compared with a 20% speed 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 procedure: 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 by the April 15 filing deadline.  And you can schedule electronic money transfers to easily send the IRS what you owe on a date of your choosing — again, as long as the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by using the IRS Immediate pay service from your checking account or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

  5. Digital storage of tax data: Submitting returns electronically implies there is an electronic backup of your tax documents.  If something happens to your paperwork, you will have an electronic backup.

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

The forms do the math for you and offer basic advice.  You can simply do your federal return with all these kinds. 

  • Utilize an internet tax preparation tax or service software: Tax preparation software and online filing services are options.  These options are an easy way to complete and e-file your forms.  Some software suppliers charge for their apps, Some are free.   The program asks you simple questions about your own life and financing to guide you through the completion of your forms.  
  • Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free aid is normally restricted based on earnings, and a few providers appeal to particular demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a record of licensed providers, but you should 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 anticipated 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 safety — especially with so many data breaches.  But experts agree that this is not a problem which should deter you by e-filing.

    “E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and sales at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted system rather than exposing your data in the mail.”

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

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

    Bottom line

    For most taxpayers, it makes sense to e-file a return since 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 make certain that you use tax preparation software from a dependable source, so that you can ensure the information you provide to transmit to the IRS is going to be kept protected.