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 submitting have their advantages and disadvantages. E-filing is safe, faster, and generally more convenient than paper filing, but filing by mail can be cheaper, although it requires 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 the new technology at the time. The new filing method eventually caught on however and, as of 2018, roughly 90% of taxpayers e-filed their yields.
The biggest advantage of electronic 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, 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 repair your tax return.
E-filing is much more secure than paper filing, according to the IRS, since the return, with all of your sensitive information, is transmitted directly to the IRS computer system.
Your refund is very likely to be processed faster because e-filing means the IRS does not need to sort or transcribe your tax return at its service center.
There’s a lesser chance that the IRS will make a mistake when processing your return because IRS employees don’t have to manually enter your return line-by-line to its own 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 are tax savvy, have a very simple situation, and are prepared to learn, you can fill tax forms in directly with IRS free fillable forms. Be aware that you should 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 might be better off using one of the IRS’ many free-file affiliates.
The Disadvantages of E-Filing
While 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 type of features you want.
Vulnerable to Outages
Glitches are always possible once you’re using the net. In 2020, TurboTax’s website experienced at least seven outages between April 15 and April 17. Also, your online service provider may face outages that could hamper your filing attempt.
Doesn’t Allow for Certain Filing Situations
Though e-filing supports most tax situations, there are certain scenarios it doesn’t support. By way of instance, you can not 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.
Benefits of Paper Filing
Filing a paper return can be very helpful in certain scenarios that e-filing can’t accommodate.
You Have a Rare Filing Situation
E-filing can only do so much. 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 pictures or PDFs to supplement your own tax return.
You Want to Build Your Tax Experience
Several online tax prep tools automate the filing process by asking you questions and using your replies to complete forms without telling you which forms it is filing on your behalf.
If you would like to learn 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 can fill out each form line-by-line and see firsthand 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 Chances of Errors
Data transcribers at the IRS must manually enter taxpayer information for each paper return they receive. As a result of this, it might result in errors that you may need to fix through an amended return.
For filers who attempt paper filing after years of electronic filing, gathering all of the forms necessary for things like student loan interest, mortgage interest, capital gains, and business deductions can be intimidating, and it might result in missing forms or errors.
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.
You can do a few things to streamline your yield entry when you file :
- Make sure your name and Social Security number are on every page, both back and front.
This is where the IRS will send any notices, so it’s vital that you don’t make a mistake.
Mail your return to the right IRS service center, since the address can change based 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.
Get an automatic extension if you are 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 might be subject to interest and penalties.
The IRS provides a list of acceptable filing options on its website, which include the following options:
- Hire a tax professional to prepare your own return.
There are particular requirements for e-filing or paper filing should you use one of these programs.
In the unlikely event 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 situation and mail it in with Form 14039, the”Identity Theft Affidavit,” notifying the IRS of the issue.
- E-filing is quickly and provides several free options
- Web or site outages can cause frustrating delays for e-filers.
- Paper filing requires more time than e-filing and can be overwhelming.
- Alternatives to filing taxes on your own include hiring a tax professional or engaging in filing aid programs.