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

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

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

Nearly all individual income tax returns submitted to the IRS are e-filed. 

When you e-file your federal income tax return, you save the IRS cash because its employees don’t need to spend time manually processing your return. In return, you can get any refund you are owed faster, particularly if you have it directly deposited into your bank account.

But what about security?  And can digital filing really give you access to all of the forms that you might need in case you have a complex tax situation?  Are there ever situations when you can not e-file?  Let us look at the benefits of e-filing, and if it may be the best filing option for your needs.

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

  1. Quick confirmation your forms are received: The IRS will affirm a tax filing has been received within 24 hours of electronic 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 receive a tax refund.  With e-filing, you’ll get your money in three weeks or less.  Choosing direct deposit may also speed up the refund process.

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

  3. Easy payment process: If you owe the IRS money, it is easier to cover at your advantage when you e-file.  You can submit returns early and pay afterwards if needed, as long as you pay by 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, filing a credit card through a payment processor for a fee, 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.

  4. Digital storage of tax data: Submitting returns electronically implies there’s a digital backup of your tax records.  If something happens to your paperwork, then you’ll have an electronic backup.

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

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

  • Free File Fillable Types — If your income is over $72,000 and you’re comfortable doing your taxes without any assistance, 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 forms. 
  • Utilize an online tax preparation service or tax applications: Tax preparation software and online filing services are alternatives.  These choices are a simple way to complete and e-file your forms.  Some applications suppliers charge for their apps, Some are free.   The software asks you simple questions about your life and financing to guide you through the completion of your forms.  
  • Get complimentary, in-person tax aid: In most states, you can find volunteers to help prepare and e-file yields.  However, eligibility for free help is typically limited based on income, and a few providers appeal to specific demographic groups.  The IRS maintains a database 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 favored approach of the majority of taxpayers.  Actually, the IRS says it expected over four tax returns to be filed through tax return prep software.

    Is e-filing really stable?

    While e-filing is suitable, you may worry about safety — particularly with all these data breaches.  But experts agree this is not a problem that should deter you by e-filing.

    “In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted network as opposed to exposing your information in the email.”

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

    It’s important to employ a trustworthy service that will help you record your taxes.  Chow advises not to e-file on a computer or utilize an internet connection which is not private.

    Bottom line

    For many taxpayers, it makes sense to e-file a yield since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just be certain that you use tax planning 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.