Dave Ramsey’s Five Foundations – Is It Best To E-File My Taxes?

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

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

Nearly all individual income tax returns submitted to the IRS are e-filed. 

In return, you can find any refund you’re owed faster, especially if you have it directly deposited to your bank account.

But what about safety?  And can digital filing really give you access to all the forms that you might need if you’ve got 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 very best filing choice for your requirements.

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

  1. Quick confirmation your forms have been obtained: The IRS will confirm a tax filing was received within one day of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived safely. 

    Timely refunds: When you submit a paper filing, it may take six to eight months to be given a tax refund.  With e-filing, you are going to get your money in three weeks or not.  Choosing direct deposit may also speed up the refund procedure.

  2. Reduced likelihood of errors: 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 info on problems discovered on e-filed returns compared with paper returns.

  3. Simple payment process: If you owe the IRS money, it’s simpler to cover at your advantage when you e-file.  You can submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline.  Additionally you have the choice to pay your balance by using the IRS Immediate pay service from the checking account or savings account, filing a credit card through a payment processor for a commission, or paying by check or money order. 

  4. Digital storage of tax information: Submitting returns electronically means there’s an electronic copy 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 get those benefits — and the process of doing this is simple.

How to e-file a tax return?

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program.  The forms do the math for you and provide basic advice.  You can simply do your federal return with these kinds. 
    2. Utilize an internet tax preparation tax or service software: Tax preparation software and online filing services are alternatives.  These options are an easy way to finish and e-file your own forms.  Some applications providers charge for their apps, Some are liberated.   The software asks you simple questions about your life and financing to guide you through the completion of your types.  
    3. 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 earnings, and a few providers appeal to particular demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are licensed IRS e-file providers. The IRS maintains a database of licensed providers, but be aware this option is very likely to be the most costly one. 

Employing online tax preparation software is far and away the preferred approach of most taxpayers.  Actually, the IRS says it anticipated over four tax returns to be submitted through tax return prep software.

Is e-filing really stable?

While e-filing is suitable, you could worry about security — particularly with all these data breaches.  But experts agree that this is not a problem that should dissuade you by e-filing.

“E-filing a tax return has proven to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product direction, advertising and revenue at LegalShield. “In actuality, it can be more secure than paper filing as 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, explains the IRS has put safety measures in place to keep your data safe.  “Vendors typically utilize IRS particular APIs that need ab sessions,” Chow says.  “All of this is routed over TLS encrypted connections.”

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

Bottom line

For many taxpayers, it is sensible 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 easy payment options.  Just make certain that you use tax planning software from a dependable source, so that you can make certain the information you provide to transmit to the IRS will be kept secure.