Dave Ramsey Success Story – 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 on everything, but they are 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.  E-filing is a favorite because it’s a win-win for taxpayers and the IRS.

In return, you could find any refund you are owed faster, especially in the event that you have it directly deposited into your bank accounts.

However, what about safety?  And can digital filing actually provide you access to all of the forms you may need in case you have a intricate tax situation?  Are there 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 needs.

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

  1. Quick confirmation your forms are received: 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 your forms have arrived . 

    Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive 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 procedure.

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

  3. Easy payment procedure: If you owe the IRS money, it is simpler to pay at your convenience if you e-file.  You can submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline.  Additionally you have the choice to pay your balance by using the IRS Immediate pay service from your checking account or savings account, submitting a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) can lead to penalties and interest.

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

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

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

  • Free File Fillable Forms — If your income is more than $72,000 and you are 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 basic advice.  You can only do your federal return with all these kinds. 
  • Use an internet tax preparation service or tax software: Tax preparation software and online filing services are alternatives.  These options are an easy way to finish and e-file your own forms.  Some applications providers charge for their programs, 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 returns.  However, eligibility for free help is typically limited based on income, and a few providers appeal to particular demographic groups. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a database of authorized providers, but you should be aware this option is very likely to be the most costly one. 

    Using online tax prep software is far and away the preferred approach of the majority of taxpayers.  Actually, the IRS says it anticipated over four tax returns to be submitted through tax return prep software.

    Is e-filing really stable?

    While e-filing is convenient, you could be worried about security — especially with all these data breaches.  But experts agree this isn’t a problem that should dissuade you by e-filing.

    “In actuality, it can be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your data in the email.”

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

    It’s important to employ a trusted service to assist you record your taxes.  Chow advises not to e-file on a computer or utilize an online connection which isn’t confidential.

    Bottom line

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