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Ten Reasons to E-File Your Taxes

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IRS E-FileE-filing stands for electronic filing and is an option the IRS offers for those who want to skip paper tax returns and go electronic. There are many benefits to e-filing your taxes, ten of which I’ll list below, but there are still a lot of people who don’t e-file for reasons I’m not completely sure I understand. I know a lot of filers simply aren’t familiar with the system and are used to filing a paper return; I completely understand their reservations. I didn’t trust electronic billpay for the longest time and I’m 28, not someone who had been mailing checks to pay for bills for twenty years.

For those on the fence, wondering if you should e-file, here are ten good reasons why you should:

  1. You may be able to e-file for free: If you earn less than $56,000 in 2008, you probably qualify for the IRS Free File program. If you have a simple return (standard deduction, using 1040EZ), TurboTax and TaxAct have free versions, with free e-file, you may qualify for.
  2. You get your tax return faster: When you E-file, you could get your return in as quickly as two or three weeks. When you file on paper, it takes a minimum of six weeks to process.
  3. Your return is more likely to be accurate: When you e-file, you typically do so through software and that software can double check your math. Any mistakes you may make with a calculator are checked by the software and remedied before you send it to the IRS. When you e-file, you’ll get an electronic confirmation that the IRS received your return. If you make an error that the software doesn’t find but that the IRS does, on their automated checks, they’ll send you a notice informing you of the error.
  4. Less likely to be lost in the mail: The post office loses and mangles mail all the time because it deals with a tremendous volume of packages and letters. When you mail your return, there’s a small possibility that it gets lost or is mangled in the mailing process. When you e-file, it can’t get mangled and is less likely to be lost.
  5. Less likely to be stolen in the mail: If you leave your return in the mailbox, there’s a possibility that an identity thief will swing by and steal your mail. I’ve heard stories of thieves going through trash (which is why people now have shredders at home) for papers, it’s no big stretch to imagine them going through mailboxes. When you e-file, the return is encrypted and thus protected against potential thieves.
  6. Less likely to be keyed into the system incorrectly: When you file a paper return, someone had to take your return and enter it into the IRS databases. Imagine someone’s entire day consists of keying in data, there’s a small chance that an error occurs and the software doesn’t catch it somehow.
  7. You don’t need to wait at the post office: Every time I’ve gone to the post office, I’ve had to wait in a line for at least ten minutes. I don’t know why but no matter when I go, 3PM on a Monday or 11AM on a Thursday, there’s always a line.
  8. You can wait until 11PM to file: Since you don’t have to go to the post office, you don’t have to finish your return before it closes! Some post offices will stay open later than their normal times, with some open until midnight, but if you e-file, you don’t have to even worry about it because you can e-file in your jammies at 11 PM. I wouldn’t recommend waiting that long but it’s an option.
  9. You save on printing and mailing costs: The printing costs of your return are likely negligible but the mailing costs, especially if you get it sent certified or registered mail. It’s not necessary that you send your return via certified or registered mail, but lots of people do it because they’re concerned the return could get lost. These two services are expensive, relative to the cost of mailing the return.
  10. Use less paper: By not printing out your return, you save a bundle of sheets right then and there. However, as demand for paper returns falls, the IRS will print and ship fewer and fewer copies of the paper forms and publications out.

Do you e-file? If so, is there a reason I missed? If not, how come? I’ve heard stories about how auditing rates are higher but I don’t think the IRS publishes statistics like that.

{ 12 comments, please add your thoughts now! }

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12 Responses to “Ten Reasons to E-File Your Taxes”

  1. anna says:

    I just wanted to say that accuracy is very important. Last year we mailed in our tax forms as usual and a few months later got a notice saying we owed an additional $2500. After many hours on the phone we finally figured out that when the person at the IRS typed in the info off of our forms they typed one number on the wrong line, thence the extra $2500. It was a real pain but they finally fixed it and we got $200 back in the end.

  2. thomas says:

    electric versions are always better, comment above as a great case in point. Unless you want to pay extra for tracking and confirmation, efile will provide you the security of at least knowing the IRS got your forms.

  3. MoneyNing says:

    e-filing is sooooooooo much easier. It also saves the government some money since the whole process is more efficient so why not?

  4. srikks says:

    Does anybody know if I can e-file California state tax return for free? I know I wont be getting my state tax refund anytime soon, but just wondering if I can e-file Cal State tax for free?

  5. Karen says:

    I used Turbotax for the first time this year, I filed today. It was so much easier, it filled out all the correct forms, and asked all the right questions of me to get to the right information. I spent the extra $39 to have an expert look it over, they were done in 24 hours. It was really worth it because they found 3 items that were entered in the wrong category, 2 on my schedule C, and they were things that could have been red flags. I would highly recommend them. Besides the fact that direct deposit means I will get it around the 13th. They are warning that mailing it in is going to take weeks because the IRS has laid some peeps off.

  6. Allison says:

    I’ve filed my own taxes, have used H&R Block, and have e-filed. The one time I used H&R Block they made a $90 error NOT in my favor (a lot of money when you are a poor 20-year old). I did my own taxes afterward, but as my income and life circumstances changed, this became too complex for me. Years later I now only e-file – I’ve done so for the past 4 years. It’s quick and clean, and I love having my returns direct-deposited within a couple of weeks.

  7. Lau says:

    E-filing is definitely the way to go if you can do it for free. I don’t see a problem with not wanting to pay for filing.

    Side note for Boston, MA resident. Check out the Boston EITC campaign sponsored by the City of Boston:

    http://www.bostonredevelopmentauthority.org/eitc/

    I’m a tax preparer volunteer. It’s a great program. Don’t go and spend hundreds on RAL and other tax loans.

  8. Gene says:

    Great post, but I’ve got one small reservation about the saving paper point. After covering personal finance, taxes and the IRS for 20 years, in Kansas City, I would recommend printing out a copy of everything you file for your own records. It will be a handy reference if you need to amend later on, or heaven forbid, get a question from IRS.

  9. Stacey says:

    E-file and free-file are awesome!

    Our tax return is just complicated enough to make paper returns a huge hassle – but simple enough that I hate to pay someone to file our taxes. We’ve used TaxCut and TaxAct through free-file and e-filed for the past four years. They pull up all the forms you need and fill out the paperwork thorugh a simple Q&A session.

  10. Yana says:

    I tried to do that last year, and failed. Our return wasn’t EZ, and I ended up going to H&R Block. Don’t know how I will do it this year, but can’t file until after Feb 15th as some of the forms will not come until then. Usually I am done sooner.

  11. brad says:

    i e-filed this year it said i will get my return by feburary 17th that is today does anyone know if they are right about the dates it is easier to e-file but are they right about the dates?

  12. ALBERTO ROMAN says:

    I e-filed on January 14, 2010 at 10:00 PM ET using Turbo Tax Home and Business program. I received confirmation about IRS accepted my return on January 16, 2010 but IRS is telling me there is a error in the system of IRS so I am supposed to receive my refund on February 12 according to the phone conversation made today. Is there somebody else going through this situation?


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