Dave Ramsey Show Denver – Is It Best To E-File My Taxes?

Is e-filing 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 when it comes 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 find any refund you’re owed faster, particularly in the event that you have it directly deposited to your bank account.

But what about safety?  And can electronic filing really provide you access to all of the forms you might need in case you have a complex tax situation?  Are there situations when you can not e-file?  Let us look at the advantages of e-filing, and whether it may be the best filing choice for your requirements.

If you are thinking about e-filing, a Few of the advantages include:

  1. Quick affirmation your forms are 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 your forms have arrived safely. 

    Timely refunds: When you submit a paper filing, it can take six to eight months to receive a tax refund.  With e-filing, you’ll get your money in 3 weeks or less.  Choosing direct deposit can also accelerate the refund procedure.

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

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

  4. Digital storage of taxation data: Submitting returns electronically means there’s a digital 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 find those advantages — and the practice of doing so is simple.

How to e-file a tax return?

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or not as you may have the ability to use the IRS Free File program. 
    2. Free File Fillable Forms — If your income is over $72,000 and you’re comfortable doing your taxes without any assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer basic guidance.  You can simply do your federal return with all these forms. 
    3. Utilize an online tax preparation service or tax applications: Tax preparation software and online filing services are options.  These choices are an easy way to complete and e-file your forms.  Some software providers charge for their programs, Some are liberated.   The program asks you simple questions about your own life and finances 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.  However, eligibility for free aid is normally restricted based on earnings, and some services cater to specific demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. 
    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 database of authorized providers, but you should be aware this alternative is likely to be the most costly one. 

      Employing online tax prep software is far and away the preferred approach of the majority of taxpayers.  Actually, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep program.

      Is e-filing really stable?

      While e-filing is convenient, you may worry about safety — especially with so many data breaches.  But experts agree this isn’t an issue that should deter you from e-filing.

      “E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and sales at LegalShield. “In fact, it can be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your data in the email.”

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

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

      Bottom line

      For many taxpayers, it is sensible to e-file a return since 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 make certain to use tax preparation software from a trusted source, so that you can make certain the information which you supply to transmit to the IRS is going to be kept protected.