Dave Ramsey’s Budget Plan – Is It Best To E-File My Taxes?

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

Americans and the IRS may not agree on everything, but they are mostly on 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. 

In return, you can find any refund you are owed faster, particularly if you have it directly deposited to your bank accounts.

However, what about security?  And can digital filing really give you access to all of the forms that you may need in case you have a intricate tax situation?  Are there situations when you can’t e-file?  Let’s look at the advantages of e-filing, and if it might be the best filing option for your requirements.

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

  1. Quick confirmation your forms are obtained: The IRS will confirm a tax filing was received within one day of digital submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived safely. 

    Timely refunds: When you submit a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you’ll get your money in 3 weeks or less.  Choosing direct deposit can also accelerate the refund procedure.

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

  3. Simple payment procedure: If you owe the IRS money, it’s easier to cover at your convenience when you e-file.  You can submit returns early and pay afterwards if needed, as long as you pay from the April 15 filing deadline.  You also have the option to pay your balance by making use of the IRS Direct pay service from your checking or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) can result in penalties and interest.

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

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

The way to e-file a tax return?

  • Free File Fillable Types — 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 forms do the math for you and provide basic guidance.  You can simply do your federal return with all these kinds. 
  • Utilize an online tax preparation service or tax software: Tax prep software and online filing services are alternatives.  These choices are a simple way to complete and e-file your own forms.  Some software suppliers charge for their apps, Some are free.   The program asks you simple questions about your life and financing to steer you through the completion of your types.  
  • Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free help is typically limited based on income, and some services appeal to particular demographic groups.  By way of example, 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 yields for you if they are licensed IRS e-file providers. The IRS maintains a record of authorized providers, but you should be aware this option is likely to be the most costly one. 

    Employing online tax prep software is far and away the favored approach of the majority of taxpayers.  Actually, the IRS says it anticipated over four in five tax returns to be filed through tax return prep program.

    Is e-filing really secure?

    While e-filing is suitable, you could worry about security — especially with so many data breaches.  But experts agree that this is not a problem that should dissuade you from e-filing.

    “In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted network as opposed to exposing your information in the email.”

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

    It’s important to use a trustworthy service to help you record your taxes.  Chow advises to not e-file on a computer or use an online connection that is not confidential.

    Bottom line

    For most taxpayers, it makes sense to e-file a return since 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 certain to use tax preparation software from a dependable source, so that you can make certain the information you provide to transmit to the IRS is going to be kept protected.