Dave Ramsey Retirement Calculator – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree about everything, but they are largely on precisely the exact 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. 

When you e-file your federal income tax return, you conserve the IRS cash because its workers don’t have to spend time manually processing your return. And in return, you could get any refund you’re owed quicker, especially if you have it directly deposited into your bank account.

But what about security?  And can digital filing really provide you access to all the forms that you might need in case you’ve got a complex tax situation?  Are there ever situations when you can not e-file?  Let’s look at the advantages of e-filing, and whether it might be the very best filing option for your requirements.

If you are Considering 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 electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived . 

    Timely refunds: When you submit a paper filing, it can take six to eight weeks to be given a tax refund.  With e-filing, you’ll receive your money in 3 weeks or less.  Choosing direct deposit can also speed up the refund process.

  2. Reduced chance of errors: According to the IRS, there’s approximately 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 returns compared with paper yields.

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

  4. Digital storage of taxation information: Submitting returns electronically implies there’s a digital backup of your tax records.  So if something happens to your paperwork, you will have an electronic backup.

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

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is over $72,000 and you are comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide standard guidance.  You can simply do your federal return with all these forms. 
    3. Use an internet tax preparation service or tax applications: Tax preparation software and online filing services are alternatives.  These choices are an easy way to finish and e-file your own forms.  Some software suppliers charge for their programs, Some are free.   The software asks you simple questions about your life and finances to guide you through the completion of your forms.  
    4. Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free aid is normally restricted based on earnings, and some providers appeal to particular demographic groups.  The IRS maintains a database of authorized providers, but be aware this option is likely to be the most costly one. 

      Using online tax prep software is far and away the favored approach of most taxpayers.  In fact, the IRS says it anticipated more than four tax returns to be submitted through tax return prep software.

      Is e-filing really stable?

      While e-filing is convenient, you may worry about security — particularly with so many data breaches.  But experts agree that this isn’t a problem which should deter you from e-filing.

      “In fact, it can be more secure than paper filing since you’re sending your personal information through an encrypted system as opposed to exposing your information in the email.”

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

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

      Bottom line

      For most taxpayers, it is sensible 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 options.  Just be sure to use tax planning software from a trusted source, so that you may make certain the information which you supply to transmit to the IRS will be kept secure.