Dave Ramsey Zero Dollar Budget – What to Consider When Filing My Taxes Online

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

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

The majority of individual income tax returns filed to the IRS are e-filed. 

When you e-file your federal income tax return, you conserve the IRS money because its employees do not have to spend time manually processing your return. In return, you can get any refund you are owed quicker, particularly if you have it directly deposited to your bank accounts.

However, what about security?  And can electronic filing really provide you access to all the forms you may need in case you have a intricate tax situation?  Are there ever situations when you can’t e-file?  Let us look at the advantages of e-filing, and whether it may be the very best filing choice for your needs.

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

  1. Quick confirmation your forms are 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 that your forms have arrived safely. 
  2. Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you’ll get your money in three weeks or less.  Choosing direct deposit can also accelerate the refund procedure.

  3. Reduced likelihood 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 info on problems discovered on e-filed returns compared with paper yields.

  4. Easy payment procedure: If you owe the IRS money, it’s easier to cover at your advantage if you e-file.  You can submit returns early and pay afterwards if needed, provided that you pay from the April 15 filing deadline.  You also have the option 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 after the filing due date (typically April 15) will lead to interest and penalties.

  5. Digital storage of taxation data: Submitting returns electronically implies there is a digital copy of your tax documents.  If something happens to your paperwork, then you’ll have an electronic backup.

The good news: Most taxpayers do decide 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 are comfortable doing your taxes without assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer standard advice.  You can only do your federal return with these forms. 
  • Use an internet tax preparation tax or service applications: Tax prep software and online filing services are alternatives.  These options are a simple way to finish and e-file your own forms.  Some software suppliers charge for their apps, Some are liberated.   The program asks you simple questions about your own life and finances to guide you through the completion of your forms.  
  • Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free aid is typically limited based on income, and a few services cater to specific demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older. 
  • Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a database of licensed providers, but you should be aware this alternative is very likely to be the most costly one. 
  • Employing online tax preparation 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 be worried about security — particularly with all these data breaches.  But experts agree this is not a problem which should deter you by e-filing.

    “In fact, it can be more secure than paper filing since you’re sending your private information through an encrypted system as opposed to exposing your data in the mail.”

    Dennis Chow, vice president of information security at SCIS Security, explains the IRS has set security measures in place to keep your information secure.  “Trainers normally use IRS particular APIs that require token sessions,” Chow says.  “All this can be routed over TLS encrypted links .”

    It’s very important to use a trusted service that will help you file your taxes.  Chow advises to not e-file on a computer or use an internet connection that is not confidential.

    Bottom line

    For many taxpayers, it makes sense to e-file a return because 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 make certain to use tax preparation software from a trusted source, so you can make certain the information which you supply to transmit to the IRS is going to be kept protected.