Dave Ramsey Radio Sacramento – Is It Best To E-File My Taxes?

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

Americans and the IRS might not agree about everything, but they are mostly on precisely the same page in regards to e-filing individual income tax returns.

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

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

But what about safety?  And can digital filing really give you access to all of the forms that you may need in case you have a complex tax situation?  Are there ever situations when you can’t e-file?  Let’s look at the advantages of e-filing, and whether it may be the very best filing choice for your needs.

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

  1. Quick confirmation your forms are received: The IRS will confirm a tax filing was received within 24 hours of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived . 
  2. Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you’ll receive your money in 3 weeks or not.  Choosing direct deposit can also accelerate the refund procedure.

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

  4. Easy payment procedure: If you owe the IRS money, it’s easier to pay at your convenience if you e-file.  You can submit returns early and pay later if necessary, provided that you pay by the April 15 filing deadline.  And you can schedule electronic funds transfers to 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 your checking account or savings account, filing 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) will result in interest and penalties.

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

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

The way to e-file a tax return?

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

  • Free File Fillable Types — If your income is over $72,000 and you are comfortable doing your earnings without assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide standard advice.  You can only do your federal return with all these forms. 
  • Use an online tax preparation tax or service applications: Tax prep software and online filing services are alternatives.  These choices are a simple way to complete and e-file your own forms.  Some software providers charge for their apps, Some are free.   The program asks you simple questions about your life and finances to guide you through the completion of your types.  
  • 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 typically limited based on income, and a few providers appeal to specific 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, such as 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 likely to be the most costly one. 

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

    Is e-filing really stable?

    While e-filing is convenient, you may worry about safety — particularly with all these data breaches.  But experts agree this isn’t an issue which should dissuade you from e-filing.

    “E-filing a tax return has turned out 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 may be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your information in the email.”

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

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

    Bottom line

    For many taxpayers, it is sensible to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just be sure that you use tax planning software from a trusted source, so you can ensure the information you provide to transmit to the IRS will be kept secure.