Dave Ramsey Stock Advice – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree about everything, but they’re largely on the exact same page in regards to e-filing individual income tax returns.

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

In return, you can find any refund you are owed quicker, particularly if you have it directly deposited into your bank account.

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

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

  1. Quick affirmation 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 does not send any acknowledgment that your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it may take six to eight weeks to be given a tax refund.  With e-filing, you’ll receive your money in 3 weeks or not.  Choosing direct deposit can also speed up the refund process.

  3. Reduced likelihood of errors: According to the IRS, there is approximately a 1 percent error rate on e-filed yields, compared with a 20% rate of errors on paper filings.  The IRS also provides more information on issues discovered on e-filed returns compared with paper yields.

  4. Easy payment procedure: 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 necessary, provided that you pay from the April 15 filing deadline.  Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from the checking or savings account, 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 lead to penalties and interest.

  5. Digital storage of tax information: Submitting returns electronically implies there’s a digital backup of your tax records.  So if something happens to your paperwork, you will 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 simple.

  • Free File Fillable Types — If your income is more than $72,000 and you’re comfortable doing your taxes without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer standard guidance.  You can simply do your federal return with all these kinds. 
  • Utilize 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 providers charge for their programs, Some are free.   The program asks you simple questions about your own life and financing to steer you through the completion of your forms.  
  • Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  But eligibility for free help is normally restricted based on income, and a few services cater to specific demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older.  The IRS maintains a database of licensed providers, but you should be aware this option is very likely to be the most costly one. 

    Employing online tax prep software is far and away the favored approach of the majority of taxpayers.  Actually, the IRS says it expected more than four in five tax returns to be filed through tax return prep program.

    Is e-filing really secure?

    While e-filing is suitable, you may worry about safety — especially with all these data breaches.  But experts agree this is not an issue which should dissuade you by 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 direction, advertising and sales at LegalShield. “In fact, it may 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 information security at SCIS Security, explains the IRS has put safety measures in place to keep your data secure.  “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says.  “All of this is routed over TLS encrypted links .”

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

    Bottom line

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