Dave Ramsey Real Estate Agent – What to Consider When Filing My Taxes Online

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

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

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

In return, you can get any refund you’re owed quicker, particularly in the event that you have it directly deposited into your bank accounts.

However, what about security?  And can digital filing actually provide you access to all of the forms you might need if you’ve got a complex tax situation?  Are there situations when you can not e-file?  Let’s look at the benefits of e-filing, and if it may be the very best filing choice for your needs.

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

  1. Quick affirmation your forms have been received: The IRS will affirm 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 . 

    Timely refunds: When you submit 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 3 weeks or not.  Choosing direct deposit can also speed up the refund procedure.

  2. Reduced likelihood of errors: According to the IRS, there’s around a 1 percent error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more information on issues 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 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.  You also have the option to pay your balance by using the IRS Direct pay service from the checking account or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) will lead to penalties and interest.

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

The fantastic news: Most taxpayers do opt 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.

The forms do the math for you and offer basic guidance.  You can simply do your federal return with all these kinds. 

  • Utilize an online tax preparation tax or service applications: Tax prep software and online filing services are alternatives.  These choices are a simple way to finish and e-file your own forms.  Some software providers charge for their programs, Some are liberated.   The program asks you simple questions about your life and financing to steer you through the completion of your forms.  
  • Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns.  However, eligibility for free aid is normally restricted based on earnings, and some services appeal to particular demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re licensed IRS e-file providers. The IRS maintains a database of authorized providers, but you should be aware this option is likely to be the most costly one. 
  • Employing online tax prep software is far and away the favored approach of most 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 secure?

    While e-filing is convenient, you could worry about security — particularly with all these data breaches.  But experts agree this is not an issue which should deter you by e-filing.

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

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

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

    Bottom line

    For most taxpayers, it is sensible to e-file a return because it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just be certain that you use tax planning software from a dependable source, so you can make certain the information which you supply to transmit to the IRS will be kept protected.