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

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

Americans and the IRS might not agree on everything, but they’re mostly on 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. 

When you e-file your federal income tax return, you conserve the IRS cash because its employees do not need to spend time manually processing your return. And in return, you could find any refund you are owed faster, especially if you have it directly deposited into your bank accounts.

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

If you are Considering e-filing, some of the advantages include:

  1. Quick affirmation your forms are received: The IRS will confirm a tax filing was received within one day of digital 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 can take six to eight weeks to be given a tax refund.  With e-filing, you’ll get your money in three weeks or less.  Choosing direct deposit can also speed up the refund procedure.

  3. Reduced likelihood of errors: In accordance with the IRS, there’s approximately a 1% error rate on e-filed returns, compared with a 20% speed of errors on paper filings.  The IRS also provides more info on issues discovered on e-filed returns compared with paper returns.

  4. Simple payment process: If you owe the IRS money, it’s simpler to pay at your convenience if you e-file.  It’s possible to submit returns early and pay later if needed, provided that you pay from the April 15 filing deadline.  You also have the option to pay your balance by using the IRS Direct pay service from the checking account or savings accounts, submitting 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 implies there’s an electronic copy of your tax records.  So if something happens to your paperwork, you will have an electronic backup.

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

The way to e-file a tax return?

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

The types do the math for you and provide basic guidance.  You can simply do your federal return with all these kinds. 

  • Utilize an online tax preparation tax or service software: Tax preparation software and online filing services are alternatives.  These choices are an easy way to finish and e-file your own forms.  Some applications providers charge for their programs, Some are free.   The program asks you simple questions about your life and finances to guide you through the completion of your types.  
  • Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free aid is normally restricted based on earnings, and some services cater to specific demographic groups. 
  • Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are authorized IRS e-file providers. The IRS maintains a record 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 preferred approach of most taxpayers.  Actually, the IRS says it anticipated more than four tax returns to be filed through tax return prep software.

    Is e-filing really secure?

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

    “E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In fact, it can be more secure than paper filing as you’re sending your personal information through an encrypted system as opposed to exposing your data in the mail.”

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

    It is important to employ a trustworthy service that will help you record your taxes.  Chow advises to not e-file on a public computer or use an online connection that is not private.

    Bottom line

    For many taxpayers, it is sensible to e-file a return since 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 make certain that you use tax planning software from a trusted source, so you can ensure the information you supply to transmit to the IRS will be kept protected.