Does Tax Free Weekend Apply To Online Shopping

Know the Pros and Cons of Digital and Paper Tax Returns

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

Both methods of submitting have their advantages and disadvantages.  E-filing is safe, faster, and generally more convenient than paper filing, but filing by email can be cheaper, though it takes the IRS longer to process refunds.

The Benefits of E-Filing

A scant number of tax professionals–five of them, according to the IRS–took advantage of this new technology at the time.  The new filing method eventually caught on however and, as of 2018, roughly 90% of taxpayers e-filed their returns.

Immediate Confirmation

The biggest benefit of electronic filing is that you’ll receive almost immediate confirmation that the IRS has received your tax return.

If the IRS finds errors on your return, you will receive a rejection notice (usually within 24-48 hours), and the notice will typically indicate what triggered the action and what you can do to fix your tax return.

Safety

E-filing is much more secure than paper filing, according to the IRS, since the return, with all of your sensitive data, is transmitted directly to the IRS computer system.

Your refund is likely to be processed quicker because e-filing means the IRS does not have to sort or transcribe your tax return at its service center.


There is a lesser chance that the IRS will make a error when processing your return because IRS employees do not need to manually enter your return line-by-line into its system.

You Do Not Have to Use a Tax Prep Program

You don’t need to use a costly tax preparation program to e-file your taxes–if you’re tax savvy, have a very simple situation, and are prepared to understand, you can fill tax forms in directly using IRS free fillable forms.  Be aware that you need to be comfortable completing basic tax forms to use the service as no advice is provided.  And if your adjusted gross income (AGI) is less than $72,000, you may be better off using one of the IRS’ many free-file affiliates.

E-filing comes with some potential headaches, too.

Fees

While there are tax prep tools which are free, many of the top tax prep firms like TurboTax, TaxSlayer, and H&R Block charge fees for tax returns that go beyond a basic filing.  Fees can exceed $100, depending on which sort of features you want.

Glitches are always possible when you’re using the net.  In 2020, TurboTax’s site experienced at least seven outages between April 15 and April 17.  Also, your online service provider may face outages that could hamper your submitting effort.

Does Not Allow for Certain Filing Situations

Though e-filing supports most tax situations, there are certain scenarios it does not support.  For instance, you can not file a return for somebody who passed away, you can not attach pictures or PDFs to your return, nor will you record before the IRS opens e-filing for the year.

Advantages of Paper Filing

Filing a paper return can be very beneficial in some specific scenarios that e-filing cannot accommodate.

You Have a Rare Filing Situation

E-filing can only do so much. For example, if you will need to prepare a tax return for somebody who passed away, you must file a paper return.  Also, paper filing lets you print and submit images or PDFs to supplement your own tax return.

You Want to Build Your Tax Expertise

Many online tax prep tools automate the filing process by asking you questions and using your replies to fill out forms without ever telling you which forms it’s filing for your benefit.

You may fill out each form line-by-line and see first-hand all of the calculations and considerations your refund requires.

There are lots of drawbacks to paper filing which make the procedure riskier and more taxing than e-filing.

Increases Odds of Errors

Data transcribers in the IRS must manually enter taxpayer information for each paper return they receive.  Because of this, it might lead to errors that you may need to fix via an amended return.

For filers who try paper filing after years of electronic filing, collecting all of the forms necessary for things like student loan interest, mortgage interest, capital gains, and business deductions can be intimidating, and it might lead to missing forms or mistakes.

You Will Need to Remember to Sign the Return

Veteran paper filers realize that you have to manually sign the paper return you submit, or the IRS won’t accept it.  Newbie paper filers often forget this fact, resulting in even longer delays than what you’d normally expect with a paper return.

Tips for Paper Filing

You can do a few things to streamline your yield entry when you file :

  1. Make sure that your name and Social Security number are on each page, both back and front. 
  2. Double-check your address. This is where the IRS will send any notices, so it is vital that you don’t make a mistake.

  3. Mail your return to the perfect IRS service center, as the address can change depending on which state you’re in, and whether you are including payment with your return.  The IRS provides a state-by-state list online so you can find the correct address.

  4. Get an automatic extension if you’re mailing your return near the official filing deadline of April 15, 2021.  Bear in mind that you ought to make a payment with your extension if you think you’ll owe anything.  Otherwise, you could be subject to penalties and interest.

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

  1.             Hire a tax professional to prepare your own return. 
  2. There are particular requirements for e-filing or paper filing should you use one of these programs.

In the unlikely event that your identity is stolen and the thief files a tax return with your data, your e-filed return will be rejected by the IRS as a duplicate.  You have to file a paper tax return in this situation and mail it in with Form 14039, the”Identity Theft Affidavit,” notifying the IRS of this issue.

Key Takeaways

    1. E-filing is quickly and provides several free options
    2. Web or site outages can cause frustrating delays for e-filers. 
    3. Paper filing requires more time than e-filing and may be overwhelming. 
    4. Alternatives to filing taxes in your include hiring a tax pro or participating in filing aid programs.