Dave Ramsey Start – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they’re largely on the same page when it comes to e-filing individual income tax returns.

The majority of individual income tax returns filed to the IRS are e-filed. 

When you e-file your federal income tax return, you conserve the IRS cash because its workers don’t have to spend time manually processing your return. And in return, you can get any refund you’re owed quicker, particularly in the event that you have it directly deposited into your bank account.

However, what about security?  And can digital filing really provide you access to all the forms you may need in case you’ve got a complex tax situation?  Are there ever situations when you can’t e-file?  Let us look at the advantages of e-filing, and whether it might be the very best filing option for your requirements.

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

  1. Quick confirmation your forms are obtained: The IRS will affirm a tax filing has been received within one day of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or less.  Choosing direct deposit may also accelerate the refund process.

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

  4. Simple payment procedure: If you owe the IRS money, it’s simpler to cover at your advantage when you e-file.  You can submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline.  Additionally you have the choice to pay your balance by making use of 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 information: Submitting returns electronically implies there is an electronic copy of your tax records.  So if something happens to your paperwork, you will have a digital backup.

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

The types do the math for you and provide standard advice.  You can only do your federal return with all these forms. 

  • Use an online tax preparation service or tax software: Tax prep software and online filing services are alternatives.  These choices are an easy way to finish and e-file your forms.  Some software providers charge for their programs, Some are liberated.   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 typically limited based on earnings, and a few providers cater to particular demographic groups. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re licensed IRS e-file providers. The IRS maintains a database of licensed providers, but you should be aware this option is very likely to be the most costly one. 

    Using online tax preparation software is far and away the favored 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 convenient, you could worry about safety — particularly with all these data breaches.  But experts agree this is not an issue that should dissuade you by e-filing.

    “E-filing a tax return has turned out to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “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 information security at SCIS Security, clarifies the IRS has put security measures in place to keep your data secure.  “Vendors typically utilize IRS specific APIs that need token sessions,” Chow says.  “All of this is routed over TLS encrypted connections”

    It’s very important to employ a trusted service that will assist you record your taxes.  Chow advises not to e-file on a public computer or use an online connection that is not confidential.

    Bottom line

    For many taxpayers, it makes sense to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just be sure that you use tax preparation software from a trusted source, so you may make certain the information you provide to transmit to the IRS is going to be kept secure.