David Paul Ramsey – What to Consider When Filing My Taxes Online

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

Americans and the IRS may not agree on everything, but they’re largely 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. 

When you e-file your federal income tax return, you conserve the IRS cash because its workers do not need to spend time manually processing your return. And in return, you can find any refund you’re owed faster, particularly in the event that you have it directly deposited to your bank accounts.

But what about safety?  And can electronic filing really give you access to all the forms you might need in case you’ve got a intricate tax situation?  Are there ever situations when you can not e-file?  Let’s look at the advantages of e-filing, and if it might be the best filing choice for your requirements.

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

  1. Quick affirmation your forms are received: The IRS will confirm a tax filing has been received within one day of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment 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 3 weeks or not.  Choosing direct deposit may also speed up the refund process.

  3. Reduced likelihood of errors: In accordance with the IRS, there’s around 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. Simple payment process: If you owe the IRS money, it is simpler to pay at your advantage when you e-file.  It’s possible to submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline.  And you can schedule electronic funds transfers to send the IRS what you owe on a date of your choosing again, provided that the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from your checking account or savings account, 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 result in penalties and interest.

  5. Digital storage of taxation information: Submitting returns electronically implies there is an electronic copy of your tax records.  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 practice 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.

The types do the math for you and offer standard advice.  You can simply do your federal return with all these kinds. 

  • Use an online tax preparation tax or service software: 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 programs, Some are liberated.   The program asks you simple questions about your life and finances to guide you through the completion of your forms.  
  • Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  However, eligibility for free aid is normally restricted based on earnings, and a few services cater to specific demographic groups.  The IRS maintains a database of authorized providers, but you should be aware this option is very likely to be the most costly one. 
  • Employing online tax prep software is far and away the favored approach of most taxpayers.  In fact, the IRS says it expected more than four in five tax returns to be filed through tax return prep software.

    Is e-filing really secure?

    While e-filing is convenient, you could be worried about safety — especially with so many data breaches.  But experts agree this is not an issue which should deter you by e-filing.

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

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

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

    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 easy payment choices.  Just be sure to use tax planning software from a trusted source, so that you may ensure the information you provide to transmit to the IRS is going to be kept secure.