Talk To Dave Ramsey – Is It Best To E-File My Taxes?

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

Americans and the IRS might not agree on everything, but they’re largely 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 popular as it is a win-win for taxpayers and the IRS.

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. And in return, you could get any refund you’re owed quicker, particularly if you have it directly deposited into your bank accounts.

However, what about security?  And can digital filing really give you access to all the forms that you may need if you’ve got a complex tax situation?  Are there situations when you can’t e-file?  Let us look at the benefits of e-filing, and if it might be the best filing choice 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 affirm a tax filing has been received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment that your forms have arrived . 
  2. Timely refunds: When you publish a paper filing, it can take six to eight months to be given a tax refund.  With e-filing, you’ll get your money in three weeks or less.  Choosing direct deposit may also speed up the refund process.

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

  4. Easy payment procedure: If you owe the IRS money, it’s simpler to pay at your advantage when you e-file.  It’s possible to submit returns early and pay afterwards if necessary, provided that you pay by the April 15 filing deadline.  Additionally you have the option to pay your balance by making use of the IRS Immediate pay service from the checking or savings account, filing a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment following the filing due date (typically April 15) will result in penalties and interest.

  5. Digital storage of tax data: Submitting returns electronically means there is a digital copy of your tax documents.  So if something happens to your paperwork, you’ll have a digital backup.

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

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

    1. Utilize 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 only do your federal return with these kinds. 
    2. Utilize an online tax preparation service or tax applications: Tax preparation software and online filing services are options.  These options are a simple way to complete and e-file your forms.  Some software suppliers charge for their apps, Some are liberated.   The software asks you simple questions about your own life and finances to guide you through the completion of your forms.  
    3. Get complimentary, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free help is normally restricted 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 who are 60 and older. 
    4. Hire a paid preparer: Paid tax preparers, such as CPAs, can e-file returns for you if they are authorized IRS e-file providers. The IRS maintains a database of licensed providers, but you should be aware this alternative is likely to be the most costly one. 

      Employing online tax prep software is far and away the favored approach of the majority of taxpayers.  Actually, the IRS says it expected over four in five tax returns to be filed through tax return prep software.

      Is e-filing really stable?

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

      “In actuality, it may be more secure than paper filing as you’re sending your personal 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 that the IRS has put safety measures in place to keep your data safe.  “Vendors typically utilize IRS particular APIs that require ab sessions,” Chow says.  “All this is routed over TLS encrypted connections”

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

      Bottom line

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