Dave Ramsey Plan In A Nutshell – Is It Best To E-File My Taxes?

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

Americans and the IRS might not agree about 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.  E-filing is popular as it is a win-win for taxpayers and the IRS.

When you e-file your federal income tax return, you save the IRS money because its workers don’t have to spend time manually processing your return. And in return, you can find any refund you’re owed quicker, particularly in the event that you have it directly deposited into your bank account.

But what about safety?  And can digital filing really provide you access to all of the forms that you might need if you have a intricate tax situation?  Are there situations when you can’t e-file?  Let’s look at the advantages of e-filing, and if it might be the best filing choice for your needs.

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

  1. Quick affirmation 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 . 
  2. Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you are going to get your money in three weeks or less.  Choosing direct deposit can also accelerate the refund process.

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

  4. Easy payment procedure: If you owe the IRS money, it is easier to pay at your advantage when you e-file.  It’s possible to submit returns early and pay later if needed, as long as 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, provided that the IRS receives your payment by Tax Day. You also have the choice to pay your balance by using the IRS Direct pay service from the checking account 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’s an electronic backup of your tax records.  So if something happens to your paperwork, you’ll have an electronic backup.

The good news: Most taxpayers do opt to e-file and get those advantages — and the practice of doing so is easy.

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program. 
    2. Free File Fillable Forms — If your income is more than $72,000 and you are comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide standard advice.  You can simply do your federal return with these kinds. 
    3. Utilize an internet tax preparation tax or service applications: Tax preparation software and online filing services are options.  These options are a simple way to finish and e-file your forms.  Some software providers charge for their apps, Some are free.   The software asks you simple questions about your life and financing to guide you through the completion of your types.  
    4. Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on earnings, and some providers cater to specific demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. 
    5. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they’re licensed IRS e-file providers. The IRS maintains a database of licensed 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 the majority of taxpayers.  Actually, the IRS says it expected more than four in five tax returns to be filed through tax return prep program.

      Is e-filing really stable?

      While e-filing is convenient, you could worry about safety — especially with all these data breaches.  But experts agree this isn’t an issue that should deter you by e-filing.

      “In actuality, it may be more secure than paper filing since you’re sending your private 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 put safety measures in place to keep your information safe.  “Vendors typically utilize IRS particular APIs that need ab sessions,” Chow says.  “All this can be routed over TLS encrypted links .”

      It’s important to employ a trustworthy service to assist you file your taxes.  Chow advises to not e-file on a public computer or utilize an internet connection which is not private.

      Bottom line

      For most taxpayers, it is sensible to e-file a yield since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make certain to use tax planning software from a trusted source, so you can ensure the information you provide to transmit to the IRS will be kept protected.