Dave Ramsey Real Estate Principles – 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 on everything, but they are largely on the exact 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.

In return, you could find any refund you are owed quicker, particularly if you have it directly deposited into your bank accounts.

However, what about security?  And can electronic filing actually give you access to all the forms that 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 benefits of e-filing, and if it might be the best filing choice for your needs.

If you’re Considering e-filing, a Few of the advantages include:

  1. Quick affirmation your forms have been received: The IRS will affirm a tax filing has been received within one day of electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived safely. 
  2. Timely refunds: When you submit 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 not.  Choosing direct deposit may also accelerate the refund procedure.

  3. Reduced likelihood 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 information on problems discovered on e-filed yields compared with paper returns.

  4. Simple payment process: If you owe the IRS money, it’s easier to cover at your advantage when you e-file.  It’s possible to submit returns early and pay later if needed, as long as you pay from the April 15 filing deadline.  And you’re able to schedule electronic money 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. Additionally you have the option to pay your balance by using the IRS Immediate pay service from your checking account or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

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

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

How to e-file a tax return?

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

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

  • Utilize an internet tax preparation service or tax software: Tax preparation software and online filing services are options.  These options are a simple way to complete and e-file your own forms.  Some software providers charge for their apps, Some are free.   The software asks you simple questions about your own life and finances to steer you through the completion of your types.  
  • Get complimentary, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free help is typically limited based on earnings, and a few services cater to specific demographic groups.  The IRS maintains a record of authorized providers, but you should 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.  Actually, the IRS says it anticipated over four tax returns to be filed through tax return prep software.

    Is e-filing really stable?

    While e-filing is suitable, you could be worried about security — particularly with all these data breaches.  But experts agree this is not an issue that should dissuade you by e-filing.

    “In fact, it may be more secure than paper filing since you’re sending your personal 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.  “Trainers normally use IRS particular APIs that need token sessions,” Chow says.  “All of this is routed over TLS encrypted connections.”

    It’s important to employ a trusted service to assist you file your taxes.  Chow advises not to e-file on a public computer or utilize an online connection that isn’t private.

    Bottom line

    For most taxpayers, it makes sense to e-file a return since 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 make sure to use tax preparation software from a trusted source, so that you can make certain the information you provide to transmit to the IRS will be kept protected.