Dave Ramsey Town Hall – Is It Best To E-File My Taxes?

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

Americans and the IRS may not agree about everything, but they’re mostly on the same page when it comes 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 don’t have to spend time manually processing your return. In return, you could find any refund you’re owed faster, especially if you have it directly deposited to your bank accounts.

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

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

  1. Quick confirmation your forms have been obtained: The IRS will affirm a tax filing was received within 24 hours of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 

    Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you are going to get your money in three weeks or not.  Choosing direct deposit can also speed up the refund procedure.

  2. Reduced likelihood of mistakes: In accordance with 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 info on issues discovered on e-filed returns compared with paper yields.

  3. Easy payment procedure: If you owe the IRS money, it is simpler to pay at your advantage if you e-file.  You can submit returns early and pay later if needed, as long as you pay by the April 15 filing deadline.  And you’re able to schedule electronic money 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. You also have the option to pay your balance by making use of the IRS Direct pay service from the checking or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

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

The fantastic news: Most taxpayers do opt to e-file and find those advantages — and the process of doing this is easy.

  • Free File Fillable Types — If your income is over $72,000 and you’re comfortable doing your earnings without any assistance, 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 these forms. 
  • Utilize an internet tax preparation service or tax software: Tax preparation software and online filing services are alternatives.  These options are a simple way to complete and e-file your forms.  Some applications providers charge for their apps, Some are liberated.   The program asks you simple questions about your life and finances to guide you through the completion of your types.  
  • 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 normally restricted based on earnings, and some services cater to particular demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers who are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file yields for you if they’re authorized IRS e-file providers. The IRS maintains a record of authorized providers, but you should be aware this alternative is likely to be the most costly one. 
  • Employing online tax preparation software is far and away the preferred approach of most taxpayers.  In fact, 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 be worried about security — particularly with all these data breaches.  But experts agree this isn’t an issue which should deter you from e-filing.

    “E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In actuality, it can be more secure than paper filing since you’re sending your personal information through an encrypted system rather than exposing your information in the email.”

    Dennis Chow, vice president of information security at SCIS Security, explains the IRS has set safety measures in place to keep your data secure.  “Vendors typically utilize 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 trusted service that will help you record your taxes.  Chow advises not to e-file on a computer or use an online connection which is not private.

    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 certain that you use tax preparation software from a trusted source, so that you may ensure the information which you supply to transmit to the IRS is going to be kept secure.