Dave Ramsey Snowball Baby Steps – What to Consider When Filing My Taxes Online

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

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

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

When you e-file your federal income tax return, you save the IRS cash because its employees do not need to spend time manually processing your return. And in return, you can get any refund you’re owed quicker, 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 the forms you may need if you have a intricate tax situation?  Are there ever situations when you can’t e-file?  Let us look at the benefits of e-filing, and if it may be the very best filing option for your needs.

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

  1. Quick affirmation your forms have been received: The IRS will confirm a tax filing was received within one day of electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it can take six to eight weeks to be given a tax refund.  With e-filing, you’ll get your money in 3 weeks or not.  Choosing direct deposit can also accelerate the refund procedure.

  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% speed of mistakes on paper filings.  The IRS also provides more information on problems discovered on e-filed returns compared with paper yields.

  4. Simple payment process: If you owe the IRS money, it’s simpler to cover at your convenience when you e-file.  It’s possible to submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline.  Additionally you have the choice to pay your balance by using the IRS Direct pay service from your checking account or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order. 

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

The good news: Most taxpayers do opt to e-file and get those benefits — and the process of doing this is simple.

How to e-file a tax return?

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

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program.  The types do the math for you and offer standard advice.  You can only do your federal return with these forms. 
    2. Use an online tax preparation tax or service 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 providers charge for their apps, Some are free.   The software asks you simple questions about your life and finances to steer you through the completion of your types.  
    3. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free help is typically limited based on income, and some services appeal to specific demographic groups.  The IRS maintains a record of authorized 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 most taxpayers.  In fact, the IRS says it anticipated over four tax returns to be submitted through tax return prep program.

      Is e-filing really secure?

      While e-filing is convenient, you could worry about safety — particularly with all these data breaches.  But experts agree this isn’t a problem which should deter you from 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 revenue 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 email.”

      Dennis Chow, vice president of data security at SCIS Security, clarifies 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 this can be routed over TLS encrypted connections”

      It’s very important to use a trustworthy service that will help you file your taxes.  Chow advises not to e-file on a public computer or utilize an online connection that isn’t confidential.

      Bottom line

      For many taxpayers, it makes sense to e-file a yield because 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 that you use tax planning software from a trusted source, so that you may ensure the information which you supply to transmit to the IRS will be kept secure.