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

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

Americans and the IRS may not agree on everything, but they are mostly on precisely the exact same page when it comes to e-filing individual income tax returns.

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

And in return, you can get any refund you are owed faster, especially if you have it directly deposited to your bank accounts.

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

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 has been received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you are going to receive your money in 3 weeks or less.  Choosing direct deposit can also accelerate the refund process.

  3. Reduced chance of errors: In accordance with the IRS, there is approximately 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 problems discovered on e-filed yields compared with paper returns.

  4. Easy payment process: If you owe the IRS money, it is simpler to cover at your advantage if you e-file.  You can submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline.  Additionally you have the choice to pay your balance by making use of the IRS Immediate pay service from the checking account or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) will lead to penalties and interest.

  5. Digital storage of tax data: Submitting returns electronically means there’s an electronic backup of your tax records.  So if something happens to your paperwork, you’ll have an electronic backup.

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

The way to e-file a tax return?

The forms do the math for you and provide standard guidance.  You can simply do your federal return with these forms. 

  • Use an online tax preparation tax or service applications: Tax preparation software and online filing services are options.  These choices are a simple way to complete and e-file your forms.  Some software suppliers charge for their apps, Some are free.   The program asks you simple questions about your life and financing to guide you through the completion of your forms.  
  • Get complimentary, 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 cater to specific demographic groups.  The IRS maintains a record of authorized providers, but you should be aware this alternative is very likely to be the most costly one. 

    Using online tax preparation software is far and away the preferred approach of most taxpayers.  Actually, the IRS says it expected more than four tax returns to be filed through tax return prep program.

    Is e-filing really stable?

    While e-filing is suitable, you could be worried about safety — particularly with all these data breaches.  But experts agree this isn’t a problem which 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 data security at SCIS Security, explains the IRS has set safety measures in place to keep your data secure.  “Trainers normally use IRS particular APIs that need ab sessions,” Chow says.  “All this can be routed over TLS encrypted connections”

    It’s important to use a trustworthy service to assist you file your taxes.  Chow advises not to e-file on a computer or utilize an online connection which is not private.

    Bottom line

    For most taxpayers, it is sensible to e-file a return since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just be certain that you 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.