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

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

Americans and the IRS may not agree on everything, but they are mostly 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. 

In return, you could find any refund you are owed faster, especially if you have it directly deposited to your bank account.

However, what about safety?  And can digital filing actually give you access to all of the forms you may need in case you’ve got a intricate tax situation?  Are there ever situations when you can not e-file?  Let us look at the benefits of e-filing, and whether it might be the best filing option for your requirements.

If you are Considering e-filing, some 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 safely. 

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

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

  3. Simple payment process: If you owe the IRS money, it is simpler to cover at your advantage when you e-file.  You can submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline.  You also have the choice to pay your balance by making use of the IRS Direct pay service from your checking or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order. 

  4. Digital storage of taxation 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 an electronic backup.

The good news: Most taxpayers do decide to e-file and get those benefits — and the process of doing this is simple.

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may have the ability to use the IRS Free File program. 
    2. Free File Fillable Forms — If your income is more than $72,000 and you’re comfortable doing your earnings without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide basic advice.  You can only do your federal return with all these kinds. 
    3. Use an internet tax preparation tax or service software: Tax prep software and online filing services are options.  These choices are an easy way to finish and e-file your forms.  Some applications providers charge for their programs, Some are liberated.   The program asks you simple questions about your own life and financing to steer you through the completion of your forms.  
    4. Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free aid is normally restricted based on income, and a few providers appeal to specific demographic groups.  The IRS maintains a database of authorized providers, but be aware this alternative is very likely to be the most costly one. 

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

      Is e-filing really stable?

      While e-filing is suitable, you may be worried 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 actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your information in the mail.”

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

      It is important to use a trustworthy service that will assist you record your taxes.  Chow advises to not e-file on a public computer or utilize an internet connection which isn’t private.

      Bottom line

      For most taxpayers, it makes sense to e-file a return because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options.  Just be certain to use tax planning software from a trusted source, so that you may make certain the information you supply to transmit to the IRS will be kept secure.