David Ramsey Baby Steps – What to Consider When Filing My Taxes Online

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 submitted to the IRS are e-filed. 

When you e-file your federal income tax return, you save the IRS cash because its employees don’t have to spend time manually processing your return. 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 actually give you access to all the forms that you might need if you’ve got a intricate tax situation?  Are there ever situations when you can’t e-file?  Let’s look at the advantages of e-filing, and if it may be the very best filing option for your needs.

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

  1. Quick affirmation your forms have been obtained: The IRS will confirm a tax filing was received within 24 hours of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you are going to get your money in 3 weeks or not.  Choosing direct deposit can also speed up the refund process.

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

  4. Easy payment procedure: If you owe the IRS money, it’s simpler to cover at your advantage if you e-file.  You can submit returns early and pay afterwards if necessary, as long as you pay by the April 15 filing deadline.  Additionally you have the choice to pay your balance by making use of the IRS Immediate pay service from the checking account or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order. 

  5. Digital storage of taxation information: Submitting returns electronically means there’s a digital copy of your tax records.  If something happens to your paperwork, you will have a digital backup.

The good news: Most taxpayers do opt to e-file and find those benefits — and the practice of doing so is simple.

How to e-file a tax return?

You have four options for submitting an electronically filed tax return to the IRS.

    1. Utilize IRS Free File: If your adjusted gross income is $72,000 or less you may be able to use the IRS Free File program.  The forms do the math for you and provide standard guidance.  You can simply do your federal return with these forms. 
    2. Utilize an internet tax preparation tax or service software: Tax preparation software and online filing services are options.  These options are a simple way to finish and e-file your forms.  Some applications suppliers charge for their programs, 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 complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file returns.  However, eligibility for free help is normally restricted based on earnings, and a few providers cater to specific demographic groups.  The IRS maintains a record of authorized providers, but you should be aware this option is very 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 more than four tax returns to be filed through tax return prep software.

Is e-filing really secure?

While e-filing is suitable, you could be worried about safety — particularly with so many data breaches.  But experts agree this isn’t a problem that should deter you by e-filing.

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

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

It’s important to use a trustworthy service to help you file 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 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 options.  Just make certain that you use tax preparation software from a trusted source, so you can ensure the information which you supply to transmit to the IRS is going to be kept protected.