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

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

Americans and the IRS might not agree on everything, but they’re largely on 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. 

And in return, you can get any refund you are owed faster, especially if you have it directly deposited to your bank accounts.

However, what about security?  And can electronic filing really give you access to all 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 whether it might be the very best filing choice for your requirements.

If you’re Considering e-filing, some 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 electronic 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 can take six to eight weeks to receive a tax refund.  With e-filing, you’ll receive your money in three weeks or less.  Choosing direct deposit may also speed up the refund procedure.

  2. Reduced chance of errors: According to the IRS, there is around 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 returns compared with paper yields.

  3. Easy payment process: If you owe the IRS money, it’s easier to cover at your convenience when you e-file.  You can submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline.  You also have the choice to pay your balance by using the IRS Immediate pay service from your checking account or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) will result in penalties and interest.

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

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

How to e-file a tax return?

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

    1. Utilize 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 Forms — If your income is more than $72,000 and you are comfortable doing your earnings without any assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer standard guidance.  You can only do your federal return with these forms. 
    3. Use an internet tax preparation service or tax software: Tax preparation software and online filing services are alternatives.  These choices are a simple way to complete and e-file your own forms.  Some software providers charge for their programs, Some are free.   The program asks you simple questions about your life and finances to guide you through the completion of your forms.  
    4. Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on earnings, and some services appeal to specific demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older.  The IRS maintains a record of authorized providers, but you should be aware this alternative is very likely to be the most costly one. 

      Using online tax preparation software is far and away the preferred approach of the majority of taxpayers.  Actually, the IRS says it expected more than four tax returns to be filed through tax return prep program.

      Is e-filing really secure?

      While e-filing is convenient, you could be worried about security — particularly with so many data breaches.  But experts agree that this isn’t an issue which should deter you from e-filing.

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

      Dennis Chow, vice president of information security at SCIS Security, explains the IRS has put safety measures in place to keep your information safe.  “Trainers normally use IRS specific APIs that require ab sessions,” Chow says.  “All this is routed over TLS encrypted links “

      It is very important to employ a trusted service to help you record your taxes.  Chow advises not to e-file on a public computer or utilize an online connection which isn’t private.

      Bottom line

      For many taxpayers, it is sensible to e-file a yield because 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 to use tax planning software from a trusted source, so you can make certain the information which you supply to transmit to the IRS is going to be kept secure.