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Should You E-File or File Taxes by Mail?

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

Both methods of filing have their advantages and disadvantages.  E-filing is safe, faster, and 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

E-filing was initially introduced in 1986, and it got off to a slow start. 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 though and, as of 2018, roughly 90% of taxpayers e-filed their yields.

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’ll receive a rejection notice (usually within 24-48 hours), and the notice will typically indicate what triggered the actions and what you can do to repair your tax return.

Safety

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

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


There is a lower chance that the IRS will make a error when processing your return because IRS employees do not have to manually put in your return line-by-line into its system.

You Don’t 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 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 guidance 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.

Fees

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

Vulnerable to Outages

Glitches are always possible when you’re using the internet.  In 2020, TurboTax’s site experienced at least seven outages between April 15 and April 17.  Also, your internet 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 situations it does not support.  By way of example, you can’t file a return for somebody who passed away, you can’t attach pictures or PDFs to your return, nor can you record before the IRS opens e-filing for the year.

Advantages of Paper Filing

Filing a paper return can be very helpful in certain scenarios that e-filing cannot accommodate.

You’ve Got a Rare Filing Situation

By way of example, if you will need to prepare a tax return for somebody who passed away, you must file a paper return.  Also, paper filing allows you to print and submit images or PDFs to supplement your tax return.

You Want to Build Your Tax Expertise

Several online tax prep tools automate the filing process by asking you questions and using your answers to complete forms without ever telling you which forms it’s filing for your benefit.

If you would like to know about, and better review, the details of your tax return, including all forms related to your tax situation, filing a paper return provides the transparency that you crave. You may fill out each form line-by-line and see firsthand all of the calculations and factors your refund requires.

Disadvantages of Paper Filing

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

Increases Odds of Errors

Data transcribers in the IRS must manually input taxpayer information for every paper return they receive.  As a result of this, it might result in errors that you might need to fix through 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 could result in 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, leading to even longer delays than what you’d normally expect with a paper return.

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

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

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

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

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

  1.             Hire a tax professional to prepare your return. 
  2. There are specific 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 must file a paper tax return in this case and mail it in with Form 14039, the”Identity Theft Affidavit,” notifying the IRS of this matter.

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 can be overpowering. 
    4. Alternatives to filing taxes on your own include hiring a tax pro or engaging in filing assistance programs.