David Ramsey Baby Steps Explained – Is It Best To E-File My Taxes?

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

Americans and the IRS may not agree on everything, but they are largely on the exact same page when it comes to e-filing individual income tax returns.

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

And in return, you can find any refund you’re owed quicker, particularly in the event that you have it directly deposited to your bank accounts.

But what about safety?  And can electronic filing actually give you access to all the forms you may need if you have 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 best filing option for your needs.

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

  1. Quick affirmation your forms are obtained: The IRS will affirm a tax filing has been received within 24 hours of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 

    Timely refunds: When you publish a paper filing, it may take six to eight weeks to be given a tax refund.  With e-filing, you are going to get your money in three weeks or less.  Choosing direct deposit can also accelerate the refund process.

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

  3. Easy payment process: If you owe the IRS money, it is simpler to pay 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.  You also have the choice to pay your balance by using the IRS Immediate pay service from the checking or savings accounts, filing a credit card through a payment processor for a commission, or paying by check or money order. 

  4. Digital storage of taxation data: Submitting returns electronically means there is an electronic copy of your tax documents.  If something happens to your paperwork, then you will have an electronic backup.

The good news: Most taxpayers do decide to e-file and get those benefits — and the process of doing so is easy.

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program.  The forms do the math for you and provide basic guidance.  You can only do your federal return with these kinds. 
    2. Use an online tax preparation tax or service applications: Tax preparation software and online filing services are options.  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 own life and financing to guide you through the completion of your forms.  
    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 help is typically limited based on earnings, and a few services appeal to specific demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file yields for you if they are authorized IRS e-file providers. The IRS maintains a database of authorized providers, but be aware this alternative is likely to be the most costly one. 

      Employing online tax prep software is far and away the favored approach of most taxpayers.  Actually, the IRS says it anticipated more than four in five tax returns to be submitted through tax return prep software.

      Is e-filing really secure?

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

      “E-filing a tax return has proven to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product leadership, advertising and sales at LegalShield. “In actuality, it may be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your data in the mail.”

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

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

      Bottom line

      For many taxpayers, it is sensible to e-file a return since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make sure that you use tax preparation software from a trusted source, so you may make certain the information which you supply to transmit to the IRS is going to be kept protected.