Dave Ramsey Scholarship – 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’re 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.  E-filing is a favorite as it is a win-win for taxpayers and the IRS.

And in return, you could get any refund you’re owed faster, particularly if you have it directly deposited into your bank account.

But what about security?  And can digital filing actually provide you access to all the forms you might need if you have a complex tax situation?  Are there ever situations when you can not e-file?  Let’s look at the benefits of e-filing, and if it may be the very best filing choice for your requirements.

If you are Considering e-filing, some of the advantages include:

  1. Quick affirmation your forms have been obtained: The IRS will affirm a tax filing has been received within one day of electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived . 
  2. Timely refunds: When you submit a paper filing, it may take six to eight months to be given a tax refund.  With e-filing, you’ll get your money in 3 weeks or less.  Choosing direct deposit may also speed up the refund process.

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

  4. Simple payment process: If you owe the IRS money, it’s simpler to pay at your convenience when you e-file.  You can submit returns early and pay afterwards if needed, as long as you pay from 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 accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) will result in interest and penalties.

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

The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the process of doing this is easy.

How to e-file a tax return?

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

  • Free File Fillable Types — If your income is more than $72,000 and you’re 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 provide basic guidance.  You can only do your federal return with these forms. 
  • Use an internet tax preparation service or tax software: Tax prep software and online filing services are alternatives.  These choices are an easy way to finish and e-file your forms.  Some applications providers charge for their apps, Some are free.   The software asks you simple questions about your life and finances to steer you through the completion of your forms.  
  • Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free aid is typically limited based on earnings, and some providers appeal to particular demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.  The IRS maintains a database of licensed 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 over four in five tax returns to be filed 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 that this is not an issue which should dissuade you from e-filing.

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

    Dennis Chow, vice president of data security at SCIS Security, clarifies that the IRS has put security measures in place to keep your data safe.  “Trainers normally use IRS particular APIs that need token sessions,” Chow says.  “All of this is routed over TLS encrypted links .”

    It’s important to employ a trustworthy service to help you record your taxes.  Chow advises to not e-file on a public computer or use an online connection which isn’t confidential.

    Bottom line

    For many taxpayers, it is sensible to e-file a return since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just make sure to use tax preparation software from a trusted source, so that you may make certain the information you supply to transmit to the IRS is going to be kept secure.