Dave Ramsey Will Kit – What to Consider When Filing My Taxes Online

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

Americans and the IRS might 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. 

And in return, you could get any refund you are owed quicker, especially if you have it directly deposited to your bank account.

However, what about security?  And can electronic filing really give 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 us look at the advantages of e-filing, and if it may be the best filing option for your requirements.

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

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

    Timely refunds: When you publish a paper filing, it can take six to eight weeks to be given a tax refund.  With e-filing, you are going to get your money in three weeks or less.  Choosing direct deposit can also speed up the refund process.

  2. Reduced likelihood of mistakes: According to the IRS, there’s approximately a 1% error rate on e-filed returns, compared with a 20% speed of errors on paper filings.  The IRS also provides more information on problems discovered on e-filed yields compared with paper returns.

  3. Simple payment process: If you owe the IRS money, it’s easier to cover at your convenience when you e-file.  It’s possible to submit returns early and pay later if necessary, as long as you pay from 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 choice to pay your balance by using the IRS Immediate pay service from your checking account or savings accounts, 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) can result in interest and penalties.

  4. Digital storage of tax information: Submitting returns electronically means there is a digital copy of your tax records.  So if something happens to your paperwork, you will have a digital backup.

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

How to e-file a tax return?

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

The types do the math for you and provide basic advice.  You can simply do your federal return with all these forms. 

  • Use an internet tax preparation service or tax software: Tax preparation software and online filing services are options.  These options are a simple way to complete and e-file your forms.  Some applications providers charge for their apps, Some are liberated.   The software asks you simple questions about your own life and finances to steer you through the completion of your forms.  
  • Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free aid is normally restricted based on earnings, and a few services appeal to specific demographic groups. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a database of authorized 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 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 secure?

    While e-filing is convenient, you could worry about safety — especially with all these data breaches.  But experts agree this is not an issue that should dissuade you from e-filing.

    “E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your private information through an encrypted system rather than exposing your data in the mail.”

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

    It is important to use a trustworthy service that will assist you record your taxes.  Chow advises not to e-file on a public computer or use an internet connection that isn’t private.

    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 options.  Just be sure to use tax preparation software from a dependable source, so you may make certain the information you provide to transmit to the IRS is going to be kept protected.