Should You E-File or File Taxes by Mail?
Know the Pros and Cons of Digital and Paper Tax Returns
When you file your taxes, you have two options for submitting your return with the Internal Revenue Service (IRS): electronically or by mail.
Both methods of submitting have their pros and cons. 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 moment. The new filing method eventually caught on though and, as of 2018, approximately 90% of taxpayers e-filed their returns.
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 in 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.
E-filing is 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 likely to be processed quicker because e-filing means the IRS doesn’t have to sort or transcribe your tax return in its service center.
Less Human Error
There’s a lower chance that the IRS will make a mistake when calculating your return because IRS employees don’t need 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 an expensive 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 with one of the IRS’ many free-file affiliates.
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 basic filing. Fees can exceed $100, depending on which type of features you desire.
Vulnerable to Outages
Glitches are always possible when 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.
Does Not 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 someone who passed away, you can’t attach pictures or PDFs to your return, nor can you file 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 cannot accommodate.
You Have a Rare Filing Situation
For instance, 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 pictures or PDFs to supplement your tax return.
You Need to Build Your Tax Expertise
Many 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.
You may fill out every form line-by-line and see first-hand all the calculations and factors your refund requires.
There are several 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 every paper return they get. As a result of this, it could lead to errors that you might have to fix via an amended return.
Overwhelming for Beginners
For filers who try paper filing after years of electronic filing, collecting all the forms necessary for things like student loan interest, mortgage interest, capital gains, and business deductions can be intimidating, and it could 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 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.
You can do a few things to streamline your yield entry when you file :
- Make sure that your name and Social Security number are on every page, both front and back.
This is where the IRS will send any notices, so it is 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’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.
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 should 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:
- Hire a tax professional to prepare your own return.
Use the Volunteer Income Tax Assistance Program, or the Tax Counseling for the Elderly program, if you’re eligible. There are particular requirements for e-filing or paper filing if you use these programs.
In the unlikely event 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 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.
- E-filing is fast 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 in your include hiring a tax professional or participating in filing aid programs.