Taxes

Should you file your tax return electronically or by mail?

When you file your taxes, you have two options for submitting your return to the Internal Revenue Service (IRS): electronically or by mail.

Both presentation methods have their pros and cons. Electronic filing is secure, faster, and generally more convenient than paper filing. Filing by mail can be cheaper, although it takes longer for the IRS to process refunds.

Learn more about choosing how to file your taxes.

Advantages of electronic filing

Electronic filing was first introduced in 1986 and got off to a slow start. A small number of tax professionals, five of them, according to the IRS, took advantage of this new technology at the time.

However, the new filing method eventually caught on, and as of December 2021, more than 150 million individual income tax returns were filed electronically.

There are several advantages to electronic filing, which are outlined below.

Immediate Confirmation

The biggest benefit of e-filing is that you will receive almost immediate confirmation that the IRS has received your tax return.

If the IRS finds errors on your return, your authorized IRS electronic file provider should try to contact you within 24 hours with an explanation, which will usually state what caused the action and what you can do to fix your tax return.

Check the email you have on file with your tax preparation software or service provider to receive notifications that the IRS accepted or rejected your return.

Security

According to the IRS, filing electronically is more secure than filing on paper because the return, with all of its sensitive information, meets strict security guidelines and is protected by modern encryption technology.

faster processing

Your refund will likely be processed sooner because e-filing means the IRS doesn’t have to file or transcribe your tax return at their service center.

less human error

There’s less chance the IRS will make a mistake when processing your return, because IRS employees don’t have to manually enter your return into their system line by line.

Skip tax preparation programs

You don’t have to use expensive tax preparation software to file your taxes electronically: If you’re tax savvy, have a simple situation, and are willing to learn, you can fill out tax forms directly using IRS Free File Fillable Forms. .

You should be comfortable completing basic tax forms to use the program, as no guidance is provided.

The IRS publishes an annual list of Free File Alliance partners who will file your return for free. To qualify, your AGI must be $73,000 or less (although some free file providers cap income eligibility at $39,000), and you may have to meet an age requirement.

Disadvantages of Electronic Filing

While the convenience and efficiency of electronic filing have made it the preferred filing option for millions of people, there are also some potential drawbacks.

Rate

Although there are free tax preparation tools, many of the major tax preparation companies, such as TurboTax, TaxSlayer, and H&R Block, charge fees for tax returns that go beyond a basic filing. Fees can exceed $100, depending on the complexity of your tax return and the services you need.

Does not allow certain presentation situations

Although electronic filing is supported in most tax situations, there are certain scenarios that are not supported. For example, you cannot:

  • Attach images or PDF files to your return
  • File before the IRS opens e-filing for the year

Advantages of filing on paper

Filing a paper return can be very helpful in certain scenarios that electronic filing cannot accommodate. Here are some examples.

You have a rare presentation situation

E-filing can only do so much. For example, if you need to file Form 1310 to claim a refund due to someone who died, you must complete the form and mail it back. Filing on paper also allows you to print and submit images or PDF files to supplement your tax return.

You want to develop your tax experience

Many online tax preparation tools automate the filing process by asking you questions and using your answers to fill out forms without ever telling you what forms you’re filing on your behalf.

If you want to better understand and review the details of your tax return, including all the forms related to your tax situation, filing a paper return gives you the transparency you need.

You can fill out each form line by line and see firsthand all the calculations and considerations that your refund requires.

Disadvantages of filing on paper

There are several drawbacks to filing on paper that make the process riskier and more challenging than filing electronically:

Greater chance of mistakes

Data transcriptionists at the IRS must manually enter taxpayer information for each paper return they receive. This could result in errors that require you to file an amended return.

Overwhelming for beginners

For taxpayers trying paper filing after years of electronic filing, it can be intimidating to gather all the necessary forms for things like student loan interest, mortgage interest, capital gains and business deductions. That could lead to errors or missing forms.

You must remember to sign the declaration

Veteran paper filers realize that you have to manually sign the paper return you submit, or the IRS won’t accept it. Novice paper filers often forget this fact, leading to even longer delays than is normal with a paper return.

Tips for filing on paper

You can do a few things to make filing your return faster when you file on paper:

  • Make sure your name and Social Security number are on each page, both front and back.
  • Please double check your address. This is where the IRS will send notices, so it’s important that you don’t make a mistake.
  • Mail your return to the correct IRS service center. The address may change, depending on the state you are in and whether you include payment with your return. The IRS provides a state-by-state list online so you can find the right address.
  • Get an automatic extension if you mail your return close to the official filing deadline. Please note that you must make a payment with your extension if you think you will owe anything. Otherwise, you could be subject to penalties and interest.

The IRS will generally accept paper filings postmarked by the filing deadline; you do not need to receive them before this date.

Alternatives to electronic and paper filing on your own

The IRS provides a list of acceptable filing options on its website, including the following:

  • Hire a tax professional to prepare your return.
  • Use the Volunteer Income Tax Assistance (VITA) program or the Tax Counseling for the Elderly (TCE) program if you are eligible. There are specific requirements for paper or electronic filing if you use either of these programs.

In the unlikely event that your identity is stolen and the thief files a tax return with your information, the IRS will reject your own electronic return as a duplicate. You must file a paper tax return in that case and mail it in with Form 14039, the “Identity Theft Affidavit,” notifying the IRS of the problem.

key takeaways

  • Electronic filing is fast and efficient, and the IRS offers several free filing options.
  • Tax preparation software like TurboTax and H&R Block charge fees (sometimes over $100) based on the complexity of your return and the services you need.
  • Filing on paper is more time consuming than filing electronically and can be overwhelming, especially for those used to filing electronically.
  • Alternatives to filing taxes on your own include hiring a tax professional or participating in filing assistance programs.

Frequently asked questions (FAQ)

Who can file taxes electronically?

Most taxpayers are eligible to file electronically. However, in some cases, you may need to apply by mail. Here are some examples:

  • You, your spouse, or one of your dependents do not have a valid Social Security number.
  • Someone has already claimed a dependent you are trying to claim.
  • You are married but file separately and are subject to community property rules.
  • Your return requires forms that can only be filed by mail.
  • You have someone with power of attorney and you require the refund to be sent to a third party.

When is the earliest I can file my taxes electronically?

The IRS typically announces the first day it will accept returns sometime in January of each year. That date usually falls in early February. You may be able to pre-file through a tax preparation service or electronic filing software, but they will hold your return until the first day the IRS begins accepting it.

How long does it take to get my tax refund?

The IRS says that most tax returns filed electronically with direct deposit take 21 days or less to complete. If you apply by mail, it could take up to six weeks. Electronically filing and accepting your refund by direct deposit is the fastest way to do your taxes.

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