Dave Ramsey Plan Book – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they’re largely on precisely the exact same page when it comes to e-filing individual income tax returns.

The majority of individual income tax returns filed to the IRS are e-filed.  E-filing is a favorite as it is a win-win for taxpayers and the IRS.

And in return, you could get any refund you’re owed quicker, particularly if you have it directly deposited to your bank accounts.

But what about security?  And can electronic filing really give you access to all of the forms you may need if you’ve got a intricate tax situation?  Are there ever situations when you can’t e-file?  Let us look at the advantages of e-filing, and if it may be the best filing choice for your requirements.

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

  1. Quick confirmation your forms are received: The IRS will affirm a tax filing has been received within 24 hours of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 
  2. 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 receive your money in 3 weeks or less.  Choosing direct deposit can also accelerate the refund procedure.

  3. Reduced chance of mistakes: According to the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% speed of errors on paper filings.  The IRS also provides more information on issues discovered on e-filed yields compared with paper returns.

  4. Simple payment procedure: If you owe the IRS money, it’s easier 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 funds 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 making use of the IRS Immediate pay service from your checking account or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) will result in interest and penalties.

  5. Digital storage of tax information: Submitting returns electronically implies there’s a digital copy of your tax records.  If something happens to your paperwork, then you will have a digital backup.

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

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you may have the ability to use the IRS Free File program. 
    2. Free File Fillable Forms — If your income is over $72,000 and you are comfortable doing your taxes without assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic guidance.  You can simply do your federal return with these forms. 
    3. Use an online tax preparation service or tax software: Tax preparation software and online filing services are options.  These choices are an easy way to complete and e-file your forms.  Some software providers charge for their apps, Some are free.   The program asks you simple questions about your life and financing to steer you through the completion of your types.  
    4. Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free aid is normally restricted based on income, and some providers appeal to particular demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. 
    5. 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 you should be aware this alternative is very likely to be the most costly one. 

      Employing online tax preparation software is far and away the favored approach of the majority of taxpayers.  In fact, the IRS says it anticipated over four tax returns to be filed through tax return prep software.

      Is e-filing really secure?

      While e-filing is suitable, you could worry about security — especially with so many data breaches.  But experts agree this isn’t an issue that should dissuade you from e-filing.

      “In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your information in the mail.”

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

      It is important to employ a trusted service that will help you record your taxes.  Chow advises not to e-file on a public computer or use an online connection that is not confidential.

      Bottom line

      For most 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 easy payment choices.  Just be sure to use tax preparation software from a dependable source, so you can make certain the information which you provide to transmit to the IRS will be kept secure.