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

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

Americans and the IRS may not agree about everything, but they are largely on precisely the exact same page in regards to e-filing individual income tax returns.

The majority of individual income tax returns filed to the IRS are e-filed.  E-filing is a favorite because it’s a win-win for taxpayers and the IRS.

In return, you can get any refund you’re owed faster, especially in the event that you have it directly deposited into your bank account.

However, what about security?  And can digital filing really give you access to all of the forms that you may need if you’ve got a complex tax situation?  Are there situations when you can’t e-file?  Let’s look at the advantages of e-filing, and whether it might be the best filing option for your needs.

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

  1. Quick confirmation your forms are obtained: The IRS will confirm a tax filing was received within 24 hours of digital submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you publish a paper filing, it can take six to eight weeks to be given a tax refund.  With e-filing, you are going to receive your money in three weeks or less.  Choosing direct deposit can also accelerate the refund process.

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

  4. Easy payment process: If you owe the IRS money, it is easier to cover at your convenience when you e-file.  You can submit returns early and pay later if needed, provided that you pay by the April 15 filing deadline.  You also have the option to pay your balance by making use of the IRS Immediate pay service from the checking account or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order. 

  5. Digital storage of taxation data: Submitting returns electronically implies there is an electronic copy of your tax records.  So if something happens to your paperwork, then you will have a digital backup.

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

The forms do the math for you and provide standard advice.  You can only do your federal return with all these forms. 

  • Utilize an internet tax preparation service or tax applications: Tax preparation 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 program asks you simple questions about your life and finances to guide you through the completion of your forms.  
  • Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free help is normally restricted based on income, and a few services appeal to specific demographic groups.  The IRS maintains a database of licensed 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 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 this is not a problem that should dissuade you from e-filing.

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

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

    It is important to use a trusted service that will assist you file your taxes.  Chow advises not to e-file on a public computer or use an internet connection that is not private.

    Bottom line

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