What Is The Dave Ramsey Plan – What to Consider When Filing My Taxes Online

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

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

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

When you e-file your federal income tax return, you save the IRS money because its employees don’t need to spend time manually processing your return. And in return, you can get any refund you’re owed quicker, especially if you have it directly deposited into your bank account.

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

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

  1. Quick confirmation your forms are received: The IRS will affirm a tax filing was received within one day 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 receive your money in 3 weeks or not.  Choosing direct deposit may also speed up the refund process.

  3. Reduced chance of errors: In accordance with the IRS, there is around a 1% error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more information on issues discovered on e-filed yields compared with paper returns.

  4. Easy payment procedure: If you owe the IRS money, it’s easier to cover at your advantage when you e-file.  You can submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline.  And you’re able to schedule electronic funds 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. You also have the choice to pay your balance by using the IRS Direct pay service from the checking account 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 after the filing due date (typically April 15) can lead to interest and penalties.

  5. Digital storage of tax data: Submitting returns electronically means there’s a digital copy of your tax records.  So if something happens to your paperwork, you will have an electronic backup.

The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the practice of doing so is easy.

    1. Use IRS Free File: If your adjusted gross income is $72,000 or not as you could be able to use the IRS Free File program. 
    2. Free File Fillable Forms — If your income is more than $72,000 and you’re comfortable doing your earnings without assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer standard guidance.  You can only do your federal return with these forms. 
    3. Use an internet tax preparation service or tax software: Tax preparation software and online filing services are options.  These choices are an easy way to complete and e-file your own forms.  Some applications providers charge for their programs, Some are free.   The program asks you simple questions about your own life and financing to guide you through the completion of your types.  
    4. Get free, in-person tax aid: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free aid is normally restricted based on earnings, and some services appeal to specific demographic groups.  The IRS maintains a database of licensed providers, but be aware this alternative 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 more than four in five tax returns to be submitted through tax return prep program.

Is e-filing really secure?

While e-filing is suitable, you could be worried about security — particularly with all these data breaches.  But experts agree this isn’t a problem that should deter you by e-filing.

“E-filing a tax return has turned out to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, advertising and revenue 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 email.”

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

It is important to employ a trustworthy service to help you file your taxes.  Chow advises not to e-file on a computer or utilize an internet connection that isn’t confidential.

Bottom line

For most taxpayers, it is sensible to e-file a return since it is 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 that you use tax planning software from a dependable source, so you may ensure the information you supply to transmit to the IRS is going to be kept secure.