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

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

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

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

When you e-file your federal income tax return, you save the IRS cash because its workers do not have to spend time manually processing your return. And in return, you can get any refund you are owed faster, especially if you have it directly deposited to your bank accounts.

However, what about security?  And can digital filing actually provide you access to all the forms you may need in case you have a complex 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 very best filing choice for your needs.

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

  1. Quick confirmation your forms are received: The IRS will confirm a tax filing was received within one day of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived safely. 
  2. 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 three 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% error rate on e-filed returns, compared with a 20% speed of errors on paper filings.  The IRS also provides more info on issues discovered on e-filed returns compared with paper yields.

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

  5. Digital storage of taxation data: Submitting returns electronically means there is a digital backup of your tax documents.  If something happens to your paperwork, you will have a digital backup.

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or not as you could be able to use the IRS Free File program. 
    2. Free File Fillable Forms — If your income is over $72,000 and you are comfortable doing your taxes without assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and provide standard guidance.  You can only do your federal return with all these forms. 
    3. Utilize an online tax preparation service or tax software: Tax preparation software and online filing services are options.  These choices are an easy way to finish and e-file your own forms.  Some software providers charge for their apps, Some are free.   The program asks you simple questions about your own life and finances to guide you through the completion of your types.  
    4. Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free help is typically limited based on earnings, and a few services cater to particular demographic groups.  For instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.  The IRS maintains a record of licensed providers, but you should be aware this option is very likely to be the most costly one. 

      Using online tax prep software is far and away the favored approach of most taxpayers.  Actually, the IRS says it anticipated over four 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 — particularly with all these data breaches.  But experts agree this isn’t an issue that should dissuade you by e-filing.

      “E-filing a tax return has turned out to be an extremely secure way to file your taxes,” states Scott Grissom, vice president of product direction, marketing and revenue at LegalShield. “In actuality, it may be more secure than paper filing since you’re sending your personal information through an encrypted network rather than exposing your data in the mail.”

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

      It is important to employ a trustworthy service that will assist you record your taxes.  Chow advises to not e-file on a computer or use an internet connection which is not confidential.

      Bottom line

      For many taxpayers, it is sensible to e-file a return since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just be sure that you use tax preparation software from a dependable source, so that you may ensure the information you provide to transmit to the IRS is going to be kept secure.