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Ten Reasons to E-File Your Taxes

Posted By Jim On 02/04/2009 @ 12:32 pm In Taxes | 12 Comments

E-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 [3], 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 [4]. If you have a simple return (standard deduction, using 1040EZ), TurboTax [5] and TaxAct [6] 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.

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[3] you should e-file: http://www.bargaineering.com/articles/should-you-e-file.html

[4] IRS Free File program: http://www.irs.gov/efile/article/0,,id=118986,00.html

[5] TurboTax: http://www.bargaineering.com/articles/r/turbotax.php?tag=10eFileReasons

[6] TaxAct: http://www.bargaineering.com/articles/r/taxact.php?tag=10eFileReasons

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