Dave Ramsey Retirement Investing – 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 on 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 submitted to the IRS are e-filed.  E-filing is a favorite as it’s a win-win for taxpayers and the IRS.

In return, you could find any refund you’re owed faster, particularly in the event that you have it directly deposited into your bank accounts.

But what about safety?  And can digital filing actually provide you access to all the forms that you may need in case you’ve got a intricate tax situation?  Are there situations when you can’t e-file?  Let’s look at the advantages of e-filing, and whether it might be the best filing choice for your requirements.

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

  1. Quick affirmation your forms are received: The IRS will confirm a tax filing has been received within 24 hours of digital submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 

    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 are going to get your money in 3 weeks or not.  Choosing direct deposit may also accelerate the refund procedure.

  2. Reduced likelihood of errors: According to the IRS, there is approximately a 1 percent error rate on e-filed returns, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more information on problems discovered on e-filed yields compared with paper yields.

  3. Easy payment process: If you owe the IRS money, it is simpler to cover at your advantage when you e-file.  It’s possible to submit returns early and pay afterwards if needed, provided that you pay by the April 15 filing deadline.  You also have the option to pay your balance by using the IRS Immediate pay service from your checking account or savings account, 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 interest and penalties.

  4. Digital storage of taxation information: Submitting returns electronically means there is a digital copy of your tax documents.  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 this is easy.

The way to e-file a tax return?

You have four options 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 may be able to use the IRS Free File program. 
    2. Free File Fillable Types — If your income is more than $72,000 and you are comfortable doing your earnings without any help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic advice.  You can simply do your federal return with these forms. 
    3. Use an internet tax preparation tax or service applications: Tax prep software and online filing services are options.  These options are a simple way to complete and e-file your forms.  Some software suppliers charge for their apps, Some are liberated.   The software asks you simple questions about your own life and financing to steer you through the completion of your forms.  
    4. Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free aid is typically limited based on income, and a few services cater to specific demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. 
    5. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a record of authorized providers, but be aware this option is very likely to be the most costly one. 

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

Is e-filing really stable?

While e-filing is suitable, you could be worried about security — especially with so many data breaches.  But experts agree this is not a problem which should deter you by e-filing.

“In fact, it can be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your information in the mail.”

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

It is very important to employ a trustworthy service to help you file your taxes.  Chow advises not to e-file on a computer or utilize an internet connection that is not private.

Bottom line

For many 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 effortless payment options.  Just make sure that you use tax planning software from a dependable source, so you can ensure the information you provide to transmit to the IRS is going to be kept secure.