Dave Ramsey New Year’s Resolutions – Is It Best To E-File My Taxes?

Is e-filing really a better way to record 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.

Nearly all individual income tax returns filed to the IRS are e-filed. 

And in return, you could find any refund you’re owed faster, especially in the event that you have it directly deposited to your bank account.

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

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

  1. Quick confirmation your forms have been received: The IRS will confirm a tax filing was received within one day of digital submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or less.  Choosing direct deposit may also accelerate the refund procedure.

  3. Reduced chance of errors: According to the IRS, there is around a 1% error rate on e-filed returns, compared with a 20% rate 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 simpler to cover 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.  And you’re able to schedule electronic money transfers to 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 option to pay your balance by making use of the IRS Immediate pay service from your checking or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

  5. Digital storage of tax data: Submitting returns electronically means there is a digital copy of your tax documents.  If something happens to your paperwork, you’ll have an electronic backup.

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

The way to e-file a tax return?

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

  • Utilize an internet tax preparation tax or service applications: Tax prep software and online filing services are alternatives.  These choices are an easy way to complete and e-file your own forms.  Some applications suppliers charge for their programs, Some are free.   The software asks you simple questions about your life and financing to steer you through the completion of your forms.  
  • Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free help is normally restricted based on earnings, and a few providers appeal to particular demographic groups.  The IRS maintains a database of licensed providers, but you should be aware this option is very likely to be the most costly one. 
  • Employing online tax prep software is far and away the preferred approach of the majority of taxpayers.  Actually, the IRS says it anticipated more than four in five tax returns to be filed through tax return prep program.

    Is e-filing really stable?

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

    “In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your data in the mail.”

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

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

    Bottom line

    For most taxpayers, it is sensible to e-file a yield because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just make sure to use tax preparation software from a trusted source, so that you can ensure the information you supply to transmit to the IRS will be kept protected.