Dave Ramsey Timing The Market – What to Consider When Filing My Taxes Online

Is e-filing really a 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.

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

If you e-file your federal income tax return, you save the IRS money because its workers do not need to spend time manually processing your return. And in return, you could get any refund you are owed faster, especially in the event that you have it directly deposited into your bank account.

But what about safety?  And can electronic filing actually give you access to all the forms you might need in case you’ve got a complex tax situation?  Are there ever situations when you can’t e-file?  Let’s look at the advantages of e-filing, and whether it might be the best filing option for your requirements.

If you are thinking about e-filing, a Few 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 electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely. 

    Timely refunds: When you publish a paper filing, it can take six to eight months to receive a tax refund.  With e-filing, you’ll receive your money in 3 weeks or less.  Choosing direct deposit can also speed up the refund procedure.

  2. Reduced chance 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 information on issues discovered on e-filed yields compared with paper returns.

  3. Easy payment procedure: 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 later if necessary, provided that you pay from the April 15 filing deadline.  Additionally you have the option to pay your balance by using the IRS Direct pay service from your checking or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order. 

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

The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the process of doing this is simple.

The way to e-file a tax return?

  • Free File Fillable Types — 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 provide basic advice.  You can simply do your federal return with these forms. 
  • Use an internet tax preparation service or tax 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 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 types.  
  • Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file yields.  But eligibility for free aid is typically limited based on income, and a few services appeal to specific demographic groups.  The IRS maintains a record of licensed providers, but be aware this alternative is very likely to be the most costly one. 

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

    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 isn’t an issue which should deter you by e-filing.

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

    Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your information safe.  “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says.  “All of this is routed over TLS encrypted links .”

    It is very important to employ a trustworthy service to assist you file your taxes.  Chow advises to not e-file on a computer or use an online connection that is not confidential.

    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 may ensure the information you provide to transmit to the IRS will be kept protected.