Dave Ramsey Zero Based Budget Worksheet – 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’re mostly on precisely the 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. 

If you e-file your federal income tax return, you conserve the IRS money because its employees don’t have to spend time manually processing your return. And in return, you could find any refund you’re owed faster, particularly in the event that you have it directly deposited into your bank accounts.

However, what about security?  And can electronic filing actually give you access to all of the forms you might need in case you have a complex tax situation?  Are there situations when you can’t e-file?  Let us look at the advantages of e-filing, and whether it might be the best filing choice for your requirements.

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

  1. Quick affirmation your forms are obtained: The IRS will affirm a tax filing has been received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived . 

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

  2. Reduced chance of errors: In accordance with the IRS, there is around a 1 percent error rate on e-filed yields, compared with a 20% speed of mistakes on paper filings.  The IRS also provides more info 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 pay at your convenience if you e-file.  It’s possible to submit returns early and pay afterwards if needed, provided that you pay by the April 15 filing deadline.  Additionally you have the option to pay your balance by making use of the IRS Immediate pay service from the checking account or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order. 

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

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

The way to e-file a tax return?

You have four choices for filing an electronically filed tax return to the IRS.

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program.  The forms do the math for you and offer basic advice.  You can only do your federal return with all these forms. 
    2. Utilize an online tax preparation service or tax software: Tax preparation software and online filing services are options.  These options are an easy way to finish and e-file your forms.  Some applications suppliers charge for their apps, Some are liberated.   The software asks you simple questions about your own life and financing to steer you through the completion of your forms.  
    3. Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free help is typically limited based on earnings, and some services appeal to specific demographic groups.  The IRS maintains a database of licensed providers, but you should be aware this option is very likely to be the most costly one. 

      Using online tax preparation software is far and away the preferred approach of the majority of taxpayers.  In fact, the IRS says it expected over four in five tax returns to be filed through tax return prep software.

      Is e-filing really secure?

      While e-filing is suitable, you could be worried about safety — particularly with all these data breaches.  But experts agree that this is not an issue which should dissuade you by e-filing.

      “E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In actuality, it may be more secure than paper filing since you’re sending your private information through an encrypted network as opposed to exposing your data in the mail.”

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

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

      Bottom line

      For many taxpayers, it makes sense to e-file a return because it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just make sure that you use tax planning software from a dependable source, so that you may ensure the information you provide to transmit to the IRS will be kept protected.