Dave Ramsey Tax Advisor – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they’re largely on precisely the exact 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. 

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

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

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

  1. Quick confirmation your forms have been obtained: The IRS will confirm a tax filing was received within 24 hours of digital 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 may take six to eight weeks to receive 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 chance of errors: According to the IRS, there’s approximately a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more information on issues discovered on e-filed returns compared with paper yields.

  4. Easy payment process: If you owe the IRS money, it is easier to pay at your advantage if you e-file.  It’s possible to submit returns early and pay afterwards if needed, as long as you pay from the April 15 filing deadline.  And you can schedule electronic funds transfers to send the IRS what you owe on a date of your choosing — again, as long as the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by using the IRS Immediate pay service from your checking or savings account, submitting 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 result in penalties and interest.

  5. Digital storage of taxation information: Submitting returns electronically means there’s an electronic copy of your tax documents.  So if something happens to your paperwork, then you’ll have a digital backup.

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

How to e-file a tax return?

  • Free File Fillable Types — If your income is over $72,000 and you are comfortable doing your earnings without help, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide basic guidance.  You can only do your federal return with all these kinds. 
  • Utilize an internet tax preparation service or tax software: Tax prep software and online filing services are alternatives.  These options are a simple 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 finances to guide you through the completion of your types.  
  • Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free aid is typically limited based on income, and some services appeal to particular demographic groups. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they’re licensed IRS e-file providers. The IRS maintains a database of licensed providers, but you should be aware this alternative is likely to be the most costly one. 

    Using online tax prep software is far and away the preferred approach of the majority of taxpayers.  In fact, 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 may be worried about safety — particularly with all these data breaches.  But experts agree that this is not a problem that should dissuade you by e-filing.

    “In fact, it may be more secure than paper filing since you’re sending your private information through an encrypted system rather than exposing your information in the mail.”

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

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

    Bottom line

    For most taxpayers, it makes sense to e-file a yield since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options.  Just be sure to use tax planning software from a trusted source, so you can make certain the information you supply to transmit to the IRS will be kept protected.