Time to put the pencils and calculators away. Electronic filing is the new norm, and if you are still an old school paper filer, an IRS tax tip posted Wednesday contains five reasons to switch.
There is no Burger King-like sign hanging outside the Department of the Treasury marketing the billions served, but the IRS has its own reason to boast – Over one billion taxpayers have e-filed their return since 1990.
80 percent of all filers now submit their tax returns electronically. The steady rise in e-filing has slowly eliminated the need for paper forms. The IRS stopped mailing out the pre-printed 1040 packages in 2011.
According to the IRS, e-filing is…
Accurate and complete – One of the benefits of e-filing is that the IRS systems that review the return are quite rigorous. Small errors in the numbers will prevent the return from being accepted, and will kick back an error message to the user. Paper returns lack these safeguards.
For example, if one digit of a Social Security number is off, the return will be rejected. Cross-checks are done as well; if a return comes in claiming a dependent, and a second return is e-filed by another taxpayer claiming that same dependent, the second return will be rejected.
Safe and secure – The IRS only partners with e-file providers that meet stringent guidelines with their encryptions. Notifications regarding return acceptance are sent out quickly, generally 24 to 48 hours after the return is submitted.
Contrast that with paper returns, which may take weeks before you have evidence from the IRS that it was received and accepted.
A fast way to get your refund – Via e-file, the IRS is able to get money back to you in an average of three weeks. An e-filed return, electing the option of direct deposit of your refund, can be processed in as little as ten days.
For that reason, be cautious about Refund Anticipation Loans offered by third party filers.
Easy to make payment on – Not only is your tax return submitted easily, but any payment owed to the IRS can also be made electronically at the same time you are filing. Transfer the money by using an e-check, your debit card or even a credit card.
Easy to use – Start by going to irs.gov and clicking on the 'FreeFile' or 'E-File' links. FreeFile is a service available to individuals whose income is under $57,000. If so, the IRS will assist you in preparing and e-filing your return for free.
Even if you do not qualify for FreeFile, services are available exclusively at irs.gov that will assist you in choosing commercial software and e-filing your return for a small fee.
For those who qualify, Volunteer Income Tax Assistance sites and Tax Counseling for the Elderly locations will e-file your return for free.
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