Dave Ramsey The Money Game – What to Consider When Filing My Taxes Online

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

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

Nearly all individual income tax returns filed to the IRS are e-filed.  E-filing is popular as it’s a win-win for taxpayers and the IRS.

And in return, you could find any refund you’re owed quicker, particularly if you have it directly deposited to your bank accounts.

But what about safety?  And can electronic filing actually provide you access to all of the forms you might need in case you have a intricate tax situation?  Are there situations when you can not e-file?  Let’s look at the advantages of e-filing, and if it may be the very best filing choice for your needs.

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

  1. Quick affirmation your forms are received: 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 your forms have arrived safely. 
  2. Timely refunds: When you publish a paper filing, it can take six to eight months to be given a tax refund.  With e-filing, you’ll receive your money in three weeks or less.  Choosing direct deposit may also speed up the refund process.

  3. Reduced likelihood of mistakes: In accordance with the IRS, there’s around a 1% error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more information on problems discovered on e-filed returns compared with paper yields.

  4. Simple payment process: If you owe the IRS money, it is simpler to pay at your advantage when you e-file.  It’s possible to submit returns early and pay afterwards if necessary, 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 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) can result in interest and penalties.

  5. Digital storage of tax data: Submitting returns electronically means there is a digital backup of your tax records.  So if something happens to your paperwork, you’ll have a digital backup.

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

How to e-file a tax return?

  • Free File Fillable Forms — If your income is more than $72,000 and you are comfortable doing your taxes without assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and offer basic guidance.  You can only do your federal return with all these forms. 
  • Utilize an online tax preparation tax or service applications: Tax prep software and online filing services are alternatives.  These choices are an easy way to finish and e-file your own forms.  Some applications providers charge for their apps, Some are free.   The software asks you simple questions about your own life and financing to guide you through the completion of your forms.  
  • Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free help is typically limited based on earnings, and some providers appeal to specific demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a record of authorized providers, but you should be aware this option is very likely to be the most costly one. 

    Employing online tax preparation software is far and away the favored approach of most taxpayers.  Actually, the IRS says it expected over four in five tax returns to be submitted through tax return prep software.

    Is e-filing really secure?

    While e-filing is convenient, you may be worried about safety — particularly with so many data breaches.  But experts agree this isn’t an issue which should deter you from e-filing.

    “In actuality, it may be more secure than paper filing as 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 the IRS has set safety measures in place to keep your information safe.  “Trainers normally use IRS particular APIs that require ab sessions,” Chow says.  “All of this is routed over TLS encrypted connections”

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

    Bottom line

    For most taxpayers, it is sensible to e-file a yield because it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make sure that you use tax planning software from a dependable source, so you may make certain the information you supply to transmit to the IRS is going to be kept protected.