Reasons to File Taxes Online

Individual e-filing has been around for a few years, and a lot taxpayers feel that it’s more convenient for them as well as for the government. Filing taxes online also helps to cut back on mistakes. Here are five potential e-filing benefits.

1. Decrease IRS employee errors. This is one of those rare cases where what’s good for the IRS is good for you also. Electronically filed returns don’t have to be keypunched into the IRS’s database. That means the IRS can hire fewer employees. It also means that you don’t have to worry about whether your data has been accurately transferred. No keypunch errors and no IRS notices based on incorrectly entered information. That’s a win-win.

2. Decrease taxpayer mistakes Some basic taxpayer mistakes – missing or incorrect Social Security numbers, for example – will result in the IRS computers rejecting an e-filed return. You can usually fix and re-send the corrected returns. That’s better than sending in an incorrect paper return and getting a letter from the IRS several months later. Note: In its promotional literature, the IRS bills this feature as promoting more accurate returns, and says that “IRS computers quickly and automatically check for errors or other missing information . . .” This does not mean that e-filing protects you from the possibility of being audited. It just means that some basic errors will be recognized – and that returns with those basic errors will have to be corrected before the IRS accepts them.

3. Faster refund and turnaround time. The IRS says that businesses and individuals who e-file will typically get their refunds within 14 days. Folks who mail in their returns can wait as long as six weeks for a check. Note, however, that the faster refund turnarounds are only goals – the IRS makes no guarantees as to when you’ll actually get a refund, electronic or otherwise. If you want to file a paper return, there’s an in-between option that can cut your waiting time for refunds. On your Form 1040, you can request that any refund be directly deposited into your bank savings or checking account. That will slice one to two weeks off of your wait.

4. You can file from your PC. If you do your own tax returns using one of the widely available consumer tax programs, you can send in your return directly from your family or home-business desktop PC. About 12 million people filed returns from their own computers in 2003. “We’re really seeing tremendous growth in terms of the number of people e-filing from their home computer,” says IRS spokesman Anthony Brandt. “And in almost all cases, people who start to e-file their returns like it enough that they continue to e-file in subsequent years.”

5. You can piggyback your state e-filing. In most cases, if you live in a state with an income tax, you can file online with your state at the same time you send in your federal return. The IRS will take the information you’ve sent and forward the appropriate data on to your state tax agency.

Comments are closed.