Dave Ramsey – 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 are largely on the 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. 

And in return, you can find any refund you are owed faster, especially in the event that you have it directly deposited to your bank account.

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

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

  1. Quick affirmation 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 does not send any acknowledgment that your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it may take six to eight months to be given a tax refund.  With e-filing, you’ll get your money in 3 weeks or less.  Choosing direct deposit can also speed up the refund procedure.

  3. Reduced chance of errors: In accordance with the IRS, there’s around a 1 percent error rate on e-filed returns, compared with a 20% rate of errors on paper filings.  The IRS also provides more information on issues discovered on e-filed yields compared with paper yields.

  4. Simple payment process: If you owe the IRS money, it is simpler to pay at your advantage if you e-file.  It’s possible to submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline.  You also have the choice to pay your balance by making use of the IRS Direct pay service from your checking or savings accounts, filing 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) will lead to interest and penalties.

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

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

How to e-file a tax return?

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

  • Free File Fillable Forms — If your income is more than $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 basic guidance.  You can only do your federal return with these forms. 
  • Use an online 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 own forms.  Some applications providers charge for their apps, Some are free.   The software asks you simple questions about your life and finances to guide you through the completion of your forms.  
  • Get complimentary, 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 some services cater to specific demographic groups.  For example, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.  The IRS maintains a record of licensed providers, but you should be aware this option is likely to be the most costly one. 
  • Employing online tax preparation software is far and away the favored 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 program.

    Is e-filing really secure?

    While e-filing is convenient, you may worry about safety — particularly with so many data breaches.  But experts agree this isn’t a problem 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, advertising and revenue at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your private information through an encrypted network rather than exposing your information in the mail.”

    Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put safety measures in place to keep your information safe.  “Vendors typically utilize IRS particular APIs that need token sessions,” Chow says.  “All of this is routed over TLS encrypted connections.”

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

    Bottom line

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