How To Use The Envelope System Dave Ramsey – Is It Best To E-File My Taxes?

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

Americans and the IRS may not agree about everything, but they are mostly on the exact same page in regards to e-filing individual income tax returns.

The majority of individual income tax returns filed to the IRS are e-filed.  E-filing is a favorite as it is a win-win for taxpayers and the IRS.

If you e-file your federal income tax return, you save the IRS cash because its employees do not need to spend time manually processing your return. In return, you could get any refund you are owed quicker, particularly if you have it directly deposited to your bank accounts.

However, what about security?  And can electronic filing really give you access to all the forms you may need if you’ve got a intricate tax situation?  Are there ever situations when you can’t e-file?  Let’s look at the benefits of e-filing, and whether it might be the very best filing option for your requirements.

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

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

    Timely refunds: When you publish a paper filing, it can take six to eight weeks to receive a tax refund.  With e-filing, you’ll receive your money in 3 weeks or not.  Choosing direct deposit may also speed up the refund procedure.

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

  3. Simple payment procedure: If you owe the IRS money, it’s easier to pay at your convenience when you e-file.  It’s possible to submit returns early and pay later if necessary, as long as you pay from the April 15 filing deadline.  And you’re able to schedule electronic money transfers to easily send the IRS what you owe on a date of your choosing again, as long as the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by making use of the IRS Immediate pay service from your checking account or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order. 

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

The good news: Most taxpayers do opt to e-file and find those advantages — and the process of doing so is easy.

  • Free File Fillable Forms — If your income is over $72,000 and you’re comfortable doing your taxes without any assistance, you can use Free File Fillable Forms from the IRS. The forms do the math for you and provide standard advice.  You can simply do your federal return with these forms. 
  • Use an internet tax preparation service or tax applications: Tax preparation software and online filing services are options.  These choices are a simple way to complete and e-file your forms.  Some software providers charge for their programs, Some are free.   The software asks you simple questions about your life and finances to guide you through the completion of your types.  
  • 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 typically limited based on earnings, and a few services appeal to particular demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older.  The IRS maintains a database of authorized providers, but you should be aware this option is likely to be the most costly one. 
  • Employing online tax prep software is far and away the preferred approach of most taxpayers.  In fact, the IRS says it anticipated over four tax returns to be submitted through tax return prep program.

    Is e-filing really secure?

    While e-filing is suitable, you may be worried about safety — particularly with all these data breaches.  But experts agree this is not an issue which should dissuade you by e-filing.

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

    Dennis Chow, vice president of information security at SCIS Security, clarifies the IRS has set safety measures in place to keep your information safe.  “Trainers normally use IRS specific APIs that require token sessions,” Chow says.  “All this can be routed over TLS encrypted connections.”

    It is important to use a trustworthy service to assist you file your taxes.  Chow advises not to e-file on a computer or utilize an online connection which is not private.

    Bottom line

    For most taxpayers, it makes sense to e-file a yield since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment choices.  Just be certain that you use tax preparation software from a dependable source, so you can make certain the information which you supply to transmit to the IRS is going to be kept secure.