Dave Ramsey Smart Goals – Is It Best To E-File My Taxes?

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

Americans and the IRS might not agree on everything, but they’re largely on the exact same page in regards to e-filing individual income tax returns.

Nearly all individual income tax returns submitted to the IRS are e-filed.  E-filing is a favorite as it is a win-win for taxpayers and the IRS.

When you e-file your federal income tax return, you conserve the IRS cash because its employees do not have to spend time manually processing your return. And in return, you can find any refund you’re owed faster, especially in the event that you have it directly deposited into your bank account.

However, what about safety?  And can electronic filing actually give you access to all the forms that you may need in case you’ve got a complex tax situation?  Are there ever situations when you can not e-file?  Let us look at the benefits of e-filing, and if it may be the very best filing choice for your needs.

If you are thinking about e-filing, a Few 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 that your forms have arrived . 

    Timely refunds: When you submit a paper filing, it may take six to eight weeks to be given a tax refund.  With e-filing, you are going to get your money in 3 weeks or not.  Choosing direct deposit may also accelerate the refund procedure.

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

  3. Simple payment procedure: If you owe the IRS money, it’s easier to cover at your advantage if you e-file.  You can submit returns early and pay later if necessary, as long as you pay by the April 15 filing deadline.  Additionally you have the option to pay your balance by using the IRS Direct pay service from your checking account or savings account, submitting 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 an electronic backup of your tax documents.  If something happens to your paperwork, you will have a digital backup.

The good news: Most taxpayers do decide to e-file and get those benefits — and the practice of doing so is easy.

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

  • Free File Fillable Types — If your income is more than $72,000 and you are comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer standard guidance.  You can simply do your federal return with these kinds. 
  • Use an online tax preparation service or tax software: Tax prep software and online filing services are options.  These options are a simple way to finish and e-file your own forms.  Some software suppliers charge for their programs, Some are free.   The software asks you simple questions about your own life and financing to guide you through the completion of your forms.  
  • Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  But eligibility for free help is typically limited based on earnings, and a few services appeal to specific demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older.  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 prep software is far and away the favored approach of the majority of taxpayers.  In fact, the IRS says it anticipated over four in five tax returns to be filed through tax return prep program.

    Is e-filing really stable?

    While e-filing is convenient, you could worry about security — particularly with all these data breaches.  But experts agree that this is not an issue which should deter you by e-filing.

    “In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted system as opposed to exposing your data in the mail.”

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

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

    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 be certain to use tax preparation software from a dependable source, so you can ensure the information which you provide to transmit to the IRS is going to be kept secure.