Dave Ramsey Sinking Funds – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree on everything, but they are largely on the exact 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 conserve the IRS money because its workers do not have to spend time manually processing your return. In return, you can get any refund you’re owed quicker, particularly in the event that you have it directly deposited to your bank accounts.

But what about security?  And can electronic filing actually give you access to all of the forms that you may need if you’ve got a complex tax situation?  Are there ever situations when you can not e-file?  Let us look at the advantages of e-filing, and if it might be the best filing option for your requirements.

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

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

  3. Reduced chance of errors: In accordance with 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 problems discovered on e-filed yields compared with paper yields.

  4. Simple payment process: If you owe the IRS money, it’s easier to pay at your advantage when you e-file.  You can submit returns early and pay later if needed, provided that you pay from the April 15 filing deadline.  And you’re able to schedule electronic funds transfers to send the IRS what you owe on a date of your choosing — again, as long as the IRS receives your payment by Tax Day. Additionally you 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 tax data: Submitting returns electronically means there’s a digital copy of your tax documents.  So if something happens to your paperwork, you will have a digital backup.

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

The way to e-file a tax return?

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or less you could be able to use the IRS Free File program.  The forms do the math for you and provide standard guidance.  You can simply do your federal return with all these kinds. 
    2. Utilize an internet tax preparation service or tax software: Tax preparation software and online filing services are options.  These options are an easy way to complete and e-file your forms.  Some applications suppliers charge for their apps, Some are free.   The software asks you simple questions about your own life and financing to guide you through the completion of your types.  
    3. Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free help is normally restricted based on income, and some services appeal to specific demographic groups.  The IRS maintains a database of licensed providers, but you should be aware this alternative is very likely to be the most costly one. 

      Employing online tax preparation software is far and away the favored approach of most taxpayers.  Actually, the IRS says it anticipated over four in five tax returns to be filed through tax return prep program.

      Is e-filing really secure?

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

      “E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “In fact, it can be more secure than paper filing as you’re sending your personal information through an encrypted network rather than exposing your data in the mail.”

      Dennis Chow, vice president of information security at SCIS Security, explains that the IRS has put security measures in place to keep your data safe.  “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says.  “All of this is routed over TLS encrypted connections”

      It is important to employ a trustworthy service that will help you file your taxes.  Chow advises not to e-file on a computer or utilize an internet connection that isn’t confidential.

      Bottom line

      For most taxpayers, it is sensible to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make sure to use tax planning software from a dependable source, so you can make certain the information which you supply to transmit to the IRS will be kept protected.