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

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 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.

And in return, you can find any refund you are owed faster, particularly in the event that you have it directly deposited into your bank account.

But what about safety?  And can digital filing actually provide you access to all of the forms 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 if it might be the best filing choice for your needs.

If you’re thinking about e-filing, some of the advantages include:

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

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

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

  3. Easy payment process: If you owe the IRS money, it’s simpler to pay at your convenience if you e-file.  It’s possible to submit returns early and pay afterwards if necessary, 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, submitting a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) will result in penalties and interest.

  4. Digital storage of tax information: Submitting returns electronically means there is an electronic copy of your tax records.  So if something happens to your paperwork, you’ll have a digital backup.

The good news: Most taxpayers do decide to e-file and find those advantages — and the practice of doing this is easy.

The types do the math for you and offer basic guidance.  You can only do your federal return with all these forms. 

  • Use an online tax preparation tax or service applications: Tax prep software and online filing services are options.  These choices are an easy way to complete and e-file your forms.  Some applications providers charge for their apps, Some are free.   The program asks you simple questions about your own life and finances to steer you through the completion of your types.  
  • Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on earnings, and some providers appeal to specific demographic groups.  By way of example, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older.  The IRS maintains a database of authorized providers, but be aware this alternative is very likely to be the most costly one. 

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

    Is e-filing really secure?

    While e-filing is convenient, you could be worried about security — especially with so many data breaches.  But experts agree this is not an issue which should deter you by e-filing.

    “E-filing a tax return has turned out to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “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 information in the email.”

    Dennis Chow, vice president of information security at SCIS Security, explains the IRS has set security 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 connections.”

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

    Bottom line

    For most 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 make sure that you use tax preparation software from a dependable source, so you can make certain the information you supply to transmit to the IRS is going to be kept secure.