Why the IRS prefers that you file your taxes electronically
It's tax season again. That means it's time to compile your W2s and 1099s alongside your expense documents and file your taxes. Years ago, doing your taxes could be a major inconvenience, as it may have required a professional to guide you through the process. But that's not necessarily true anymore.
Today's technology has simplified many complex tasks — and filing your annual tax return is one of them. Online tax solutions like TurboTax, Tax Slayer and H&R Block make it easy to file your taxes electronically. But how does the Internal Revenue Service (IRS) feel about electronically filed tax returns? The agency prefers them — here's why.
File your taxes electronically today.
Why the IRS prefers that you file your taxes electronically
The IRS has published several documents about the benefits of filing your taxes electronically. So, why does the IRS prefer you file your tax return over the web rather than on paper? Here are a few reasons:
So your taxes are accurate and complete
It's important that your tax return is accurate and complete, but it can be easy to make mistakes on paper tax documents. Simple things like forgetting a line item could add processing time or result in the IRS rejecting your tax paperwork.
But the good news is that there are checks and balances in e-filing systems. Leading tax software solutions won't let you file an incomplete return. If you try, the software will prompt you to fill in all required information before filing your return.
Moreover, "electronic returns are not susceptible to having pages getting separated or lost entirely as compared to a paper return," says Rob Burnette, investment advisor representative and professional tax preparer at Outlook Financial Center.
Don't wait; e-file now to get your tax return as fast as possible.
E-filed returns reduce processing times
It can take longer for the IRS to process paper documents than electronic documents, which makes sense. After all, the paper documents you send must be digitized. So, when you send paper forms, there's an additional step with processing your returns. Moreover, your forms may have errors and omissions that could lead to further delays in processing.
When you e-file your return, the software does the math and won't allow you to omit information. Plus, your e-filed return is digital, alleviating the IRS' need to digitize the documents you send and speeding up processing times. That benefits you, too.
"Filing electronically will allow your refund to be processed more quickly and have a refund available sooner than a paper filing," says Burnette.
The e-file system is secure
The IRS developed its e-file system to meet strict guidelines. As such, it has what the IRS calls "the best encryption technology" available. As a result of its focus on security, the IRS says it "has safely and securely processed more than 1.2 billion e-filed individual tax returns since the program began."
The e-file system keeps filing history records
"Electronically filed returns record the filing history and acceptance by the IRS of the return," says Burnette.
This automatic record-keeping can come in handy if you need to verify filing dates.
Tips for filing your taxes electronically
Here are a few tips to help you get the most out of switching to electronic tax filings:
- Use reputable tax software: It's important to use a tax software solution that has a proven record of accuracy and security. Some of the most popular options on the market today include TurboTax, Tax Slayer and H&R Block.
- Opt for direct deposit: You can receive your return via check or direct deposit. If you want to receive your return as quickly as possible, you should choose the direct deposit option. "If you use the direct deposit of funds, they are normally available in around 21 days versus four to six weeks for a paper check," Burnette says. This protects you from theft too, as "during this time of year, thieves will access mailboxes looking for tax refund checks."
- Be alert to scams: During tax season, IRS impersonation scams are prevalent. Be aware that they exist and know how to spot them. In particular, keep in mind that the IRS rarely calls consumers and only does so after they've unsuccessfully attempted to contact the taxpayer by mail multiple times. So, if you receive an unsolicited phone call from someone claiming to be an IRS representative and you haven't received several mailed documents from the IRS pertaining to the topic of the call, the person on the other end of the line is likely a scammer.
The bottom line
The IRS prefers that taxpayers e-file their returns because it is typically the fastest, most convenient and most accurate way to file. Not to mention the fact that e-filing is generally more secure than paper filings. So, if you're still filing your taxes on paper forms, consider switching to e-filed documents this year.
