Dave Ramsey Retirement Mutual Funds – Is It Best To E-File My Taxes?

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

Americans and the IRS may not agree on everything, but they are largely 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 a favorite because it is a win-win for taxpayers and the IRS.

In return, you can get any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank account.

However, what about security?  And can electronic filing actually give you access to all of the forms you might need if you have a complex tax situation?  Are there ever situations when you can’t e-file?  Let us look at the advantages of e-filing, and whether it might be the very best filing choice for your requirements.

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

  1. Quick confirmation your forms have been obtained: The IRS will affirm a tax filing was received within one day of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived . 

    Timely refunds: When you publish a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or not.  Choosing direct deposit can also speed up the refund process.

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

  3. Easy payment procedure: If you owe the IRS money, it is simpler to pay at your convenience when you e-file.  It’s possible to submit returns early and pay afterwards if necessary, provided that 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. You also have the choice to pay your balance by making use of the IRS Direct pay service from your checking or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

  4. Digital storage of tax data: Submitting returns electronically means there is a digital copy of your tax records.  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 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 earnings without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer basic advice.  You can only do your federal return with these forms. 
    3. Utilize an internet tax preparation service or tax applications: Tax prep software and online filing services are alternatives.  These options are a simple way to complete and e-file your own forms.  Some software suppliers charge for their apps, Some are liberated.   The program asks you simple questions about your own life and financing to steer you through the completion of your types.  
    4. Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free help is normally restricted based on earnings, and a few providers cater to particular demographic groups. 
    5. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they’re licensed IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this alternative is very 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 expected over four tax returns to be filed through tax return prep program.

      Is e-filing really stable?

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

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

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

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

      Bottom line

      For most 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 easy payment options.  Just make certain to use tax planning software from a trusted source, so that you may make certain the information you provide to transmit to the IRS is going to be kept secure.