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

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

Americans and the IRS might not agree about everything, but they are largely on precisely the exact 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. 

In return, you could find any refund you’re owed quicker, particularly if you have it directly deposited to your bank accounts.

However, what about safety?  And can digital filing really provide you access to all the forms you may need in case you have a complex tax situation?  Are there situations when you can’t e-file?  Let us look at the advantages of e-filing, and if it may be the best filing choice for your requirements.

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

  1. Quick affirmation your forms have been obtained: The IRS will affirm a tax filing was received within one day of digital submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived . 

    Timely refunds: When you submit a paper filing, it can 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: According to the IRS, there’s around a 1% error rate on e-filed yields, compared with a 20% rate of errors on paper filings.  The IRS also provides more information on issues discovered on e-filed returns compared with paper returns.

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

  4. Digital storage of taxation information: Submitting returns electronically means there is a digital backup of your tax documents.  So if something happens to your paperwork, you’ll have an electronic backup.

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

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or not as you may have the ability to use the IRS Free File program.  The types do the math for you and offer standard advice.  You can simply do your federal return with these kinds. 
    2. Use an internet tax preparation service or tax applications: Tax prep software and online filing services are alternatives.  These choices are a simple way to complete and e-file your own forms.  Some software suppliers charge for their apps, Some are liberated.   The software asks you simple questions about your own life and financing to steer you through the completion of your types.  
    3. Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns.  But eligibility for free aid is typically limited based on income, and some services cater to specific demographic groups. 
    4. Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they are licensed IRS e-file providers. The IRS maintains a record of authorized providers, but be aware this option is very likely to be the most costly one. 

      Employing online tax prep software is far and away the preferred approach of the majority of taxpayers.  Actually, the IRS says it anticipated more than four tax returns to be filed through tax return prep software.

      Is e-filing really stable?

      While e-filing is convenient, you may worry about safety — especially with so many data breaches.  But experts agree this isn’t a problem that should deter you from e-filing.

      “E-filing a tax return has proven to be a very secure way to file your taxes,” states Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “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 information in the email.”

      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 specific APIs that require ab sessions,” Chow says.  “All of this is routed over TLS encrypted links “

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

      Bottom line

      For most taxpayers, it makes sense to e-file a return because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just be sure that you use tax preparation software from a dependable source, so you can ensure the information which you supply to transmit to the IRS is going to be kept protected.