David Ramsey’s – Is It Best To E-File My Taxes?

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

Americans and the IRS might not agree about 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 submitted to the IRS are e-filed.  E-filing is popular because it is a win-win for taxpayers and the IRS.

In return, you could get any refund you’re owed faster, especially if you have it directly deposited into your bank account.

But what about security?  And can digital filing actually provide you access to all of the forms that you may need in case you have a intricate tax situation?  Are there situations when you can’t e-file?  Let’s look at the benefits of e-filing, and if it may be the best filing option for your needs.

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

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

    Timely refunds: When you submit a paper filing, it may take six to eight months to receive a tax refund.  With e-filing, you’ll receive your money in 3 weeks or less.  Choosing direct deposit can also speed up the refund procedure.

  2. Reduced likelihood of mistakes: According to the IRS, there is around a 1 percent 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 yields 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 needed, provided that you pay by the April 15 filing deadline.  And you can schedule electronic money 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 using the IRS Immediate pay service from your checking or savings accounts, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) can result in interest and penalties.

  4. Digital storage of tax data: Submitting returns electronically implies there is a digital backup of your tax records.  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.

How to e-file a tax return?

    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 types do the math for you and provide basic advice.  You can only do your federal return with these forms. 
    2. Use an internet tax preparation tax or service software: Tax prep software and online filing services are alternatives.  These choices are a simple way to complete and e-file your forms.  Some applications providers charge for their apps, Some are liberated.   The program asks you simple questions about your life and finances to guide you through the completion of your forms.  
    3. Get complimentary, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free aid is normally restricted based on income, and a few services cater to particular demographic groups.  The IRS maintains a database of licensed 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 preferred approach of most taxpayers.  Actually, the IRS says it expected more than four tax returns to be submitted through tax return prep software.

      Is e-filing really secure?

      While e-filing is convenient, you could worry about security — particularly with all these data breaches.  But experts agree this isn’t a problem which should dissuade you by e-filing.

      “E-filing a tax return has turned out to be a very 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 since you’re sending your private information through an encrypted network rather than exposing your information in the mail.”

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

      It is very important to use a trusted service that will assist you record your taxes.  Chow advises to not e-file on a computer or utilize an online connection which isn’t confidential.

      Bottom line

      For most taxpayers, it makes sense to e-file a yield since it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and easy payment options.  Just be certain that you use tax planning software from a trusted source, so that you can make certain the information you provide to transmit to the IRS is going to be kept secure.