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

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

Americans and the IRS might not agree on everything, but they’re 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. 

If you e-file your federal income tax return, you save the IRS money because its employees do not need to spend time manually processing your return. And in return, you can find any refund you are owed faster, particularly if you have it directly deposited to your bank account.

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

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

  1. Quick affirmation your forms are 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. 

    Timely refunds: When you submit a paper filing, it can take six to eight months to receive a tax refund.  With e-filing, you are going to receive your money in three weeks or less.  Choosing direct deposit may also accelerate the refund procedure.

  2. Reduced likelihood of errors: According to the IRS, there is around a 1% error rate on e-filed returns, 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 process: If you owe the IRS money, it’s easier to cover at your advantage when you e-file.  It’s possible to submit returns early and pay later if needed, provided that you pay from the April 15 filing deadline.  And you’re able to 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. You also have the choice to pay your balance by making use of the IRS Direct pay service from your checking or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

  4. Digital storage of tax information: Submitting returns electronically means there’s an electronic backup of your tax records.  So if something happens to your paperwork, then you will have a digital backup.

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

The forms do the math for you and provide standard advice.  You can simply do your federal return with these kinds. 

  • Utilize an online tax preparation service or tax software: Tax preparation software and online filing services are options.  These choices are an easy way to finish and e-file your forms.  Some software suppliers charge for their programs, Some are liberated.   The software asks you simple questions about your own life and financing to guide you through the completion of your types.  
  • Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free aid is normally restricted based on income, and a few services appeal to specific demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a record of authorized providers, but 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 tax returns to be filed through tax return prep software.

    Is e-filing really secure?

    While e-filing is suitable, you could be worried about security — particularly with all these data breaches.  But experts agree this isn’t a problem 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,” states Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your data in the email.”

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

    It is very important to use a trusted service to help you file your taxes.  Chow advises not to e-file on a computer or use an online connection that 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 preparation software from a dependable source, so that you can make certain the information which you provide to transmit to the IRS is going to be kept protected.