Dave Ramsey Peace University – What to Consider When Filing My Taxes Online

Is e-filing a much 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.

The majority of individual income tax returns submitted to the IRS are e-filed. 

If you e-file your federal income tax return, you save the IRS money because its employees don’t need to spend time manually processing your return. In return, you could find any refund you’re owed faster, especially in the event that you have it directly deposited into your bank accounts.

But what about safety?  And can electronic filing really provide you access to all the forms you might need if you have a intricate 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 choice for your needs.

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

  1. Quick confirmation your forms are obtained: The IRS will confirm a tax filing has been received within one day of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 

    Timely refunds: When you publish a paper filing, it can take six to eight months to be given a tax refund.  With e-filing, you’ll get your money in three weeks or less.  Choosing direct deposit can also accelerate the refund procedure.

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

  3. Easy payment process: If you owe the IRS money, it’s easier to cover at your convenience when you e-file.  You can submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline.  You also have the option to pay your balance by making use of the IRS Immediate pay service from your checking or savings accounts, submitting 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 penalties and interest.

  4. Digital storage of tax data: Submitting returns electronically implies there is a digital copy of your tax records.  If something happens to your paperwork, you will have a digital backup.

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

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

  • Free File Fillable Types — If your income is over $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 only do your federal return with these forms. 
  • Use an internet tax preparation tax or service applications: Tax preparation software and online filing services are options.  These options are a simple way to complete and e-file your own forms.  Some software providers charge for their programs, Some are free.   The software asks you simple questions about your own 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 returns.  But eligibility for free aid is typically limited based on income, and a few services cater to particular demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older.  The IRS maintains a record of authorized providers, but you should be aware this option is likely to be the most costly one. 

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

    Is e-filing really stable?

    While e-filing is suitable, you could worry about security — 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 an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and revenue at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your data in the email.”

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

    It’s important to employ a trustworthy service to assist you file your taxes.  Chow advises not to e-file on a computer or utilize an online connection that isn’t confidential.

    Bottom line

    For many taxpayers, it is sensible to e-file a yield since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just make certain that you use tax preparation software from a dependable source, so you may ensure the information you supply to transmit to the IRS will be kept secure.