Dave Ramsey Quick Start Budget – What to Consider When Filing My Taxes Online

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

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

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

In return, you could get any refund you are owed faster, particularly in the event that you have it directly deposited to your bank accounts.

However, what about safety?  And can digital filing actually 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’s look at the advantages of e-filing, and if it might be the best filing choice for your requirements.

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

  1. Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was received within 24 hours of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived . 

    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 are going to receive your money in three weeks or not.  Choosing direct deposit may also speed up the refund procedure.

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

  3. Simple payment procedure: If you owe the IRS money, it’s easier to cover at your convenience if you e-file.  It’s possible to submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline.  And you can 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. You also have the option to pay your balance by using the IRS Direct pay service from your checking or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

  4. Digital storage of tax data: Submitting returns electronically means there’s a digital copy of your tax documents.  So if something happens to your paperwork, you will have a digital backup.

The good news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing so is simple.

The way to e-file a tax return?

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

The types do the math for you and provide standard guidance.  You can simply do your federal return with these forms. 

  • Use an online 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 forms.  Some applications suppliers charge for their programs, Some are free.   The software asks you simple questions about your life and finances to steer you through the completion of your types.  
  • Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on earnings, and some services appeal to specific demographic groups. 
  • 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 licensed providers, but you should 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 tax returns to be filed through tax return prep software.

    Is e-filing really secure?

    While e-filing is suitable, you may be worried about security — particularly with so many data breaches.  But experts agree that this isn’t an issue which should dissuade you by e-filing.

    “E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “In fact, it may be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your information in the email.”

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

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

    Bottom line

    For most taxpayers, it is sensible to e-file a return since 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 that you use tax preparation software from a trusted source, so that you may ensure the information which you supply to transmit to the IRS will be kept secure.