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 more convenient than paper filing, but filing by mail can be cheaper, although 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 the 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 will receive almost immediate confirmation that the IRS has received your tax return.
If the IRS finds errors in your return, you will receive a rejection notice (usually within 24-48 hours), and the note will typically indicate what triggered the actions 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, together with all of your sensitive information, is transmitted directly to the IRS computer system.
Your refund is likely to be processed faster because e-filing means the IRS does not need to sort or transcribe your tax return in its service center.
Less Human Error
There’s a lesser chance that the IRS will make a error when processing your return because IRS employees don’t have to manually put in your return line-by-line to its own system.
You Don’t Have to Use a Tax Prep Program
You don’t have 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 with 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 might be better off with one of the IRS’ many free-file affiliates.
When 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.
Vulnerable to Outages
Glitches are always possible once 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 filing effort.
Does Not Allow for Certain Filing Situations
Though e-filing supports most tax situations, there are certain scenarios it does not support. By way of instance, you can’t 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.
Benefits of Paper Filing
Filing a paper return can be very helpful in some specific scenarios that e-filing cannot accommodate.
You’ve Got a Rare Filing Situation
E-filing can only do so much. By way of instance, if you will need to prepare a tax return for someone who passed away, you have to file a paper return. Also, paper filing allows you to print and submit pictures or PDFs to supplement your own tax return.
You Need to Build Your Tax Expertise
Several online tax prep tools automate the filing process by asking you questions and using your answers to fill out forms without ever telling you which forms it is filing for your benefit.
If you want 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 every 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 at the IRS must manually enter taxpayer information for every paper return they receive. Because of this, it could result in errors that you might need to fix via an amended return.
For filers who try 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 lead to missing forms or errors.
You 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 will not 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 return submission when you file :
- Make sure your name and Social Security number are on every page, both front and back.
Double-check your address. This is where the IRS will send any notices, so it is important that you don’t make a mistake.
Mail your return to the perfect IRS service center, as 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 you can find the correct address.
Get an automatic extension if you’re mailing your return near the official filing deadline of April 15, 2021. Bear in mind that you should 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 return.
Use the Volunteer Income Tax Assistance Program, or the Tax Counseling for the Elderly program, if you’re eligible. There are specific requirements for e-filing or paper filing should you use these programs.
In the unlikely event that your identity is stolen and the thief files a tax return with your information, 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 the matter.
- E-filing is fast and provides several free options
- Web or website 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 pro or engaging in filing aid programs.