What Mutual Funds Does Dave Ramsey Own – What to Consider When Filing My Taxes Online

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

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

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

If you e-file your federal income tax return, you conserve the IRS money because its workers do not have to spend time manually processing your return. In return, you can get any refund you are owed quicker, especially in the event that you have it directly deposited into your bank account.

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

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

  1. Quick affirmation 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 . 
  2. Timely refunds: When you submit a paper filing, it may take six to eight weeks to receive a tax refund.  With e-filing, you’ll get your money in three weeks or not.  Choosing direct deposit may also speed up the refund process.

  3. Reduced likelihood of mistakes: In accordance with the IRS, there’s approximately a 1 percent error rate on e-filed yields, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more info on problems discovered on e-filed returns 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.  It’s possible to submit returns early and pay later if needed, provided that you pay from the April 15 filing deadline.  And you can 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 option to pay your balance by using the IRS Immediate pay service from your checking account or savings account, submitting a credit card through a payment processor for a commission, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) will lead to interest and penalties.

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

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

The way to e-file a tax return?

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

    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 forms do the math for you and provide standard guidance.  You can simply do your federal return with these forms. 
    2. Use an internet tax preparation service or tax software: Tax prep software and online filing services are options.  These choices are a simple way to finish and e-file your forms.  Some applications providers charge for their apps, Some are free.   The software asks you simple questions about your own life and financing 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.  However, eligibility for free aid is typically limited based on income, and a few providers cater to particular demographic groups.  By way of example, Tax Counseling for the Elderly programs focus primarily on assisting filers that are 60 and older.  The IRS maintains a database of licensed providers, but be aware this option is likely to be the most costly one. 

Using online tax prep software is far and away the favored approach of most taxpayers.  In fact, the IRS says it expected more than four tax returns to be submitted through tax return prep program.

Is e-filing really stable?

While e-filing is suitable, you may be worried about safety — particularly with all these data breaches.  But experts agree this isn’t a problem that should dissuade you from e-filing.

“E-filing a tax return has turned out to be an extremely secure way to file your taxes,” says Scott Grissom, vice president of product leadership, marketing and revenue at LegalShield. “In fact, it can 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 safety measures in place to keep your data secure.  “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says.  “All of this is routed over TLS encrypted connections”

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

Bottom line

For many taxpayers, it is sensible to e-file a yield because 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 sure to use tax planning software from a trusted source, so that you may ensure the information you supply to transmit to the IRS will be kept protected.