Velocity Banking Dave Ramsey – What to Consider When Filing My Taxes Online

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

Americans and the IRS might not agree about everything, but they’re mostly on precisely the same page when it comes to e-filing individual income tax returns.

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

And in return, you can get any refund you are owed faster, especially in the event that you have it directly deposited into your bank accounts.

But what about safety?  And can digital filing really give you access to all of the forms that you might need if you’ve got a complex tax situation?  Are there ever situations when you can not e-file?  Let us look at the benefits of e-filing, and whether it might be the best filing choice for your requirements.

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

  1. Quick affirmation your forms have been obtained: The IRS will affirm a tax filing has been received within one day of electronic submission.  For paper filers, the IRS doesn’t send any acknowledgment your forms have arrived . 
  2. 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 receive your money in three weeks or not.  Choosing direct deposit can also accelerate the refund procedure.

  3. Reduced chance 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 info on problems discovered on e-filed returns compared with paper returns.

  4. Simple payment procedure: If you owe the IRS money, it’s easier to pay at your advantage if you e-file.  You can submit returns early and pay afterwards if needed, provided that you pay by the April 15 filing deadline.  And you’re able to schedule electronic funds transfers to 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 option to pay your balance by using the IRS Direct pay service from the checking account 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 following the filing due date (typically April 15) can result in penalties and interest.

  5. Digital storage of tax information: Submitting returns electronically means there is a digital backup of your tax records.  If something happens to your paperwork, then you will have a digital backup.

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

    1. Use IRS Free File: If your adjusted gross income is $72,000 or not as you may be able to use the IRS Free File program.  The types do the math for you and provide standard guidance.  You can only do your federal return with these forms. 
    2. Utilize an internet tax preparation service or tax software: Tax preparation software and online filing services are alternatives.  These choices are a simple way to complete and e-file your forms.  Some software suppliers charge for their programs, Some are free.   The software asks you simple questions about your own life and finances to guide you through the completion of your forms.  
    3. Get free, in-person tax aid: In most states, you will find volunteers to help prepare and e-file yields.  But eligibility for free help is normally restricted based on income, and some providers 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 database of licensed providers, but be aware this alternative is very likely to be the most costly one. 

Using online tax prep software is far and away the preferred approach of most taxpayers.  Actually, the IRS says it anticipated over four in five tax returns to be filed through tax return prep software.

Is e-filing really stable?

While e-filing is suitable, you may worry about security — especially with so many data breaches.  But experts agree that this is not an issue that should deter you from e-filing.

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

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

It’s very important to employ a trustworthy service that will assist you file your taxes.  Chow advises not to e-file on a public computer or utilize an online connection which isn’t confidential.

Bottom line

For most taxpayers, it is sensible to e-file a return since it’s the most convenient way to file your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just be sure to use tax planning 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.