The First Foundation Dave Ramsey – Is It Best To E-File My Taxes?

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

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

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

In return, you can get any refund you are owed quicker, particularly if you have it directly deposited into your bank accounts.

But what about security?  And can electronic filing actually give you access to all the forms that you might need in case you’ve got a complex tax situation?  Are there situations when you can not e-file?  Let’s look at the advantages of e-filing, and if it may be the best filing option 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 confirm a tax filing was received within 24 hours of digital 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 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 can also speed up the refund procedure.

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

  3. Easy payment process: If you owe the IRS money, it is easier to pay at your convenience if you e-file.  You can submit returns early and pay afterwards if needed, as long as you pay by the April 15 filing deadline.  And you’re able to 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 making use of 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. 

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

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

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

The forms do the math for you and provide standard guidance.  You can only do your federal return with these forms. 

  • Utilize an online tax preparation tax or service software: Tax preparation software and online filing services are options.  These options are an easy way to complete and e-file your own forms.  Some applications providers charge for their apps, Some are free.   The software asks you simple questions about your life and financing to steer 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 yields.  However, eligibility for free aid is normally restricted based on income, and a few services cater to particular demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.  The IRS maintains a database of licensed providers, but you should be aware this option is likely to be the most costly one. 
  • Employing online tax preparation software is far and away the preferred approach of the majority of taxpayers.  In fact, the IRS says it expected over four in five tax returns to be submitted through tax return prep program.

    Is e-filing really secure?

    While e-filing is convenient, you could be worried about security — particularly with all these data breaches.  But experts agree that this isn’t an issue which should dissuade you by e-filing.

    “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 data in the email.”

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

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

    Bottom line

    For many 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 easy payment choices.  Just be certain that you use tax preparation software from a trusted source, so that you may ensure the information which you supply to transmit to the IRS will be kept secure.