Dave Ramsey Podcast Spotify – Is It Best To E-File My Taxes?

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

Americans and the IRS may not agree on everything, but they’re mostly on the exact same page when it comes 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 workers don’t have to spend time manually processing your return. In return, you could find any refund you are owed faster, especially in the event that you have it directly deposited into your bank account.

However, what about safety?  And can electronic filing actually give you access to all of the forms you may need in case you’ve got a complex tax situation?  Are there situations when you can not e-file?  Let’s look at the advantages of e-filing, and whether it might be the best filing choice for your requirements.

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

  1. Quick confirmation your forms are obtained: The IRS will affirm a tax filing has been received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived safely. 

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

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

  3. Simple payment process: If you owe the IRS money, it is simpler to cover at your convenience if you e-file.  You can submit returns early and pay afterwards if needed, as long as you pay from 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, provided that 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 account or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) can result in penalties and interest.

  4. Digital storage of taxation data: Submitting returns electronically implies there is a digital backup of your tax records.  So if something happens to your paperwork, then you’ll have a digital backup.

The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the practice of doing this is simple.

How to e-file a tax return?

  • Free File Fillable Types — If your income is over $72,000 and you’re 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 standard advice.  You can simply do your federal return with all these forms. 
  • Utilize an internet tax preparation tax or service software: Tax preparation software and online filing services are alternatives.  These choices are a simple way to complete and e-file your forms.  Some software providers charge for their programs, Some are liberated.   The software asks you simple questions about your life and financing to guide you through the completion of your forms.  
  • Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free help is normally restricted based on earnings, and a few services appeal to particular demographic groups.  By way of example, 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 database of authorized providers, but be aware this alternative is very likely to be the most costly one. 

    Employing online tax preparation software is far and away the preferred approach of most taxpayers.  Actually, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep program.

    Is e-filing really stable?

    While e-filing is suitable, you may be worried about security — especially with so many data breaches.  But experts agree this isn’t a problem that should deter you from e-filing.

    “In actuality, it can be more secure than paper filing since you’re sending your private information through an encrypted system rather than 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 data safe.  “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says.  “All of this is 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 which isn’t private.

    Bottom line

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