The Benefits of E-filing Your Tax Return

The Internal Revenue Service has stated that electronic filing is the safest, fastest and easiest way for taxpayers to file their tax returns. Furthermore, e-filing is good for the tax system, good for taxpayers and good for the tax-preparation industry. Here are 10 reasons to join over 160-million taxpayers and e-file this coming tax year.

1. Security. Filing electronically eliminates the possibility that personal information, such as your Social Security number, can fall into the wrong hands while going through the mail. An e-filed return is encrypted to prevent any access to data as it moves between tax software and the IRS agency. The IRS has safely and securely processed more than 1.3-billion e-filed tax returns from individuals since the program began.

2. Acknowledgement of receipt. The IRS’s e-file program provides immediate acknowledgement that the IRS has received the return. There is no chance of your return being mangled, lost or delayed in the mail. Also, you save postage on registered or certified mail.

3. Human error. When you mail in at tax return, someone at the IRS must enter or scan your data into their systems. Keying errors and technical problems can interfere with getting your taxes filed properly. When you e-file, your data goes directly into the IRS computer system.

4. Error rate reduced. Paper returns have 20 times more errors than e-filed returns. If there is an e-filed error, you get a rejection notice in as little as 48 hours. The notice will tell you how to fix your tax return so it will be acceptable to the IRS. Fix it, then click and resubmit the return. Incorrect paper returns take six weeks to correct.

5. Quicker refunds. The IRS says that a taxpayer filing electronically receives a refund in half the time as a taxpayer who files a paper return—even faster with direct deposit. Direct-deposited refunds can be received in as few as 10 days. If your refund is sizeable, this can be a major reason for wanting to e-file.

6. Refund Anticipation Loan (RAL). If you have a refund coming, you can also borrow money based on an anticipated income-tax refund using a refund anticipation loan (RAL), which is a contract between you and a bank lender. Filing electronically speeds this process as well.

7. Online payment. If you owe tax, you can pay online and schedule an electronic-funds withdrawal any time through the due date of your return. You can always opt to mail a check with the voucher or use a credit card.

8. Convenience. Since you do not have to go to the post office, you do not have to finish your return before it closes! Day or night, you can e-file 24 hours a day, seven days a week.

9. It is easy. You can usually file your state return at the same time you electronically file your federal return.

10. Go green. Protect our environment. E-filing saves paper and needless copying; less frequent trips to post office will save you gas.

Electronic filing is the new norm. Over 97 percent of all filers now submit their tax returns using the e-file method. It is time to put the pencils and calculators away.