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Advantages of e-filing

According to the IRS, almost 88% of individual tax returns were filed electronically for the 2018 tax year.

From my experience, many taxpayers mail their returns simply because that is the way they have always done it.  However, there are many advantages of e-filing, which could change someone’s decision about their method of filing.

E-filing helps taxpayers avoid mistakes, such as an incorrect Social Security number.  Taxpayers who e-file receive an acknowledgement from the IRS within minutes, telling them their return has been accepted.  If a return is rejected, the acknowledgement says why the IRS rejected the tax return.

You can start checking the status of your refund 24 – 48 hours after it has been e-filed.  Once you have e-filed your tax return, you can check your status using the IRS “Where’s my refund” tool.  You will not be able to start checking the status of your tax refund for 4 weeks if you mail a paper tax return.

People who e-file get faster refunds.  When taxpayers e-file and use direct deposit for their refund, in most cases, the refunds are received in about 10 business days.  The IRS says that 90% of refunds are processed within 21 days.  On the other hand, a mailed paper tax return can take up to six weeks.  Also, since e-filed returns are generally more accurate, there probably won’t be additional delays.  Delays can be caused when the IRS finds mistakes that must be fixed before the agency can send a refund.

Efiling is safe since it meets strict security guidelines.  It uses modern encryption technology to protect tax returns.  This effort has helped put safeguards in place to make electronic tax filing a safe and secure option.

Tax returns can be e-filed whether you are getting a refund or need to make a payment.  If you owe, you can e-file early and set up an automatic payment on any day until the April deadline.  You can pay electronically from your bank account with IRS Direct Pay.  You can also file without paying and set up payment at a later date.

E-filing provides proof that your return was filed.  This is particularly important if you owe.  If you owe and mail your return, it is important to send it by certified mail.  Sending your return, by certified mail provides proof your return was mailed in the event that your return is lost by the Post Office or the IRS.  Without proof, you may be charged substantial late filing penalties, which can be as high as 25% of the amount of your taxes.

David Zubler is a tax accountant and an Enrolled Agent in East Tennessee, the author of four books, and a philanthropist.  All of his proceeds from the books go to a charitable foundation he created for underprivileged children.  He is also the founder of Your Tax Care which provides tax education. David can be reached for questions and consultation at yourtaxcare.com.