Of all the intricacies of tax preparation, few aspects are as beneficial as electronic tax filing or e-filing. Not only is this advantageous to the Internal Revenue Service, as it reduces paperwork, it is also a benefit to individuals filing their tax returns. Here are just a few of the ways you can enjoy all electronic filing has to offer.
The number one reason most people file their taxes electronically is because of the increased speed of receiving a refund. The IRS promises that you will get your refund twice as fast if you e-file instead of sending your return through the mail. The reason for this is that your return is received by the IRS within a few hours of preparation and it is in a format easily processed. The normal time to receive your tax refund from the IRS through regular filing is 6 to 8 weeks. However, with electronic filing, you can get it mailed to you in three weeks or directly deposited into your bank account in two. To get your refund even faster, you may utilize one of the forms of refund anticipation loan (RAL). Coupled with electronic filing, you can get your refund in as little as 2 days! This reason alone is enough to make you ask for your return to be electronically filed.
Along with speed, convenience is also a determining factor. It is no longer necessary to carry your return around, stuff it in an envelope, and lose it in your car for two weeks before you remember to mail it. With a few clicks, you tax return is on its way to the IRS with little effort or hassle.
Another positive aspect of electronic filing is that it improves the likelihood of an accurate return. It is easy to miscalculate if you do not have a computer program verifying your information. The IRS estimates that 20% of paper returns contain errors, while only 1% of e-filed returns do. These errors cost valuable time and may even lead to an audit in worst case scenarios.
Verification that the IRS receives your return is also an added bonus with electronic filing. When you drop an envelope in the mail, you can not be assured they ever even receive it! Can you imagine getting a threatening letter from the IRS a few months down the road and having no idea they did not get the return in the first place? However, if you electronically file, you get a confirmation that the Internal Revenue Service received it. That is peace of mind.
If you wait until the last minute to file your taxes, you may have to battle a mob at the post office trying to get it done on time. You may like standing in line beside the smelly guy at the post office, but electronic filing is sure less hectic and is more pleasing to the senses as well.