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

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

Americans and the IRS may not agree about everything, but they are mostly on precisely the 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 because it is a win-win for taxpayers and the IRS.

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

But what about security?  And can electronic filing actually give you access to all the forms you might need in case you’ve got 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 best filing choice for your requirements.

If you are Considering e-filing, some 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 digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely. 

    Timely refunds: When you submit a paper filing, it may take six to eight months to be given a tax refund.  With e-filing, you are going to get your money in three weeks or less.  Choosing direct deposit may also speed up the refund procedure.

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

  3. Easy payment process: If you owe the IRS money, it is simpler to pay at your advantage if you e-file.  It’s possible to submit returns early and pay later if needed, provided that you pay by the April 15 filing deadline.  You also have the choice to pay your balance by making use of the IRS Immediate pay service from your checking or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) will result in interest and penalties.

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

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

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 may have the ability to use the IRS Free File program.  The types do the math for you and provide basic guidance.  You can simply do your federal return with these kinds. 
    2. Utilize an internet tax preparation service or tax applications: Tax prep software and online filing services are options.  These choices are a simple way to finish and e-file your forms.  Some software providers charge for their apps, Some are free.   The program asks you simple questions about your life and financing to steer you through the completion of your forms.  
    3. Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free aid is normally restricted based on income, and some providers appeal to specific demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older. 
    4. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they’re licensed IRS e-file providers. The IRS maintains a database of licensed 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 preferred approach of the majority of taxpayers.  In fact, the IRS says it expected more than four tax returns to be filed through tax return prep software.

      Is e-filing really secure?

      While e-filing is convenient, you may be worried about safety — especially with all these data breaches.  But experts agree that this is not a problem which should dissuade you from e-filing.

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

      Dennis Chow, vice president of data security at SCIS Security, explains the IRS has set safety measures in place to keep your information secure.  “Trainers normally use IRS specific APIs that require ab sessions,” Chow says.  “All this can be routed over TLS encrypted connections.”

      It’s important to employ a trusted service to assist you file your taxes.  Chow advises to not e-file on a computer or use an internet connection that is not private.

      Bottom line

      For most taxpayers, it makes sense to e-file a return because it is 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 preparation software from a dependable source, so you can make certain the information which you provide to transmit to the IRS is going to be kept secure.