Dave Ramsey Show Call In – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree about everything, but they are largely on the same page when it comes to e-filing individual income tax returns.

Nearly all individual income tax returns submitted to the IRS are e-filed. 

When you e-file your federal income tax return, you save the IRS money because its workers do not need to spend time manually processing your return. In return, you can get any refund you’re owed faster, particularly in the event that you have it directly deposited to your bank account.

However, what about security?  And can electronic filing really provide you access to all the forms that you may 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 if it may be the best filing choice for your requirements.

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

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

    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’ll get your money in 3 weeks or not.  Choosing direct deposit may also speed up the refund procedure.

  2. Reduced chance of mistakes: According to the IRS, there is around a 1 percent error rate on e-filed yields, 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 returns.

  3. Easy payment procedure: If you owe the IRS money, it is easier to pay at your advantage when you e-file.  You can submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline.  Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from your checking account or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order. 

  4. Digital storage of taxation data: Submitting returns electronically implies there’s an electronic backup of your tax documents.  If something happens to your paperwork, then you will have a digital backup.

The fantastic news: Most taxpayers do opt to e-file and find those advantages — and the process of doing so is simple.

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 could 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 taxes without assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer basic guidance.  You can only do your federal return with all these kinds. 
    3. Use an online tax preparation service or tax software: Tax preparation software and online filing services are options.  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 software asks you simple questions about your life and financing to steer you through the completion of your forms.  
    4. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free help is typically limited based on earnings, and a few providers cater to specific demographic groups. 
    5. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a record of licensed providers, but you should be aware this alternative is likely to be the most costly one. 

Employing online tax preparation software is far and away the preferred approach of the majority of taxpayers.  In fact, the IRS says it anticipated 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 could be worried about safety — particularly with all these data breaches.  But experts agree that this is not a problem which should dissuade you by e-filing.

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

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

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

Bottom line

For many taxpayers, it makes sense to e-file a yield since 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 be certain to use tax preparation software from a trusted source, so that you may ensure the information you supply to transmit to the IRS is going to be kept protected.