Advantages of Filing Taxes Electronically
Filing your tax return electronically has many advantages. First and foremost, you will receive almost immediate confirmation that the Internal Revenue Service (IRS) has received your tax return. Your certified service provider for electronic tax filing is required to attempt to contact you within 24 hours with an explanation if the IRS finds errors on your return. This message will usually indicate what led to this action and what you can do to correct your tax return.
Electronic filing is more secure than filing by mail, according to the IRS. All sensitive information is subject to strict security standards and protected by modern encryption technology.
The processing of tax returns is faster when filed electronically, as the IRS does not need to sort or manually enter your tax return at its service center.
There is a lower chance of human error when processing your tax return, as IRS employees do not need to manually enter your return line by line into their system.
You can bypass tax preparation software, as you do not necessarily have to use expensive tax preparation software or a website to file your tax return. You can fill out tax forms directly using IRS Free File Fillable Forms if you are knowledgeable about taxes and have a simple situation and want to learn. However, you must be comfortable filling out basic tax forms to use the program because no guidance is provided.
Disadvantages of Filing Taxes Electronically
Despite the convenience and efficiency that electronic filing offers, there are some potential drawbacks as well.
Fees are not cheap. Some tax preparation tools are free, but many leading tax preparation companies such as TurboTax, TaxSlayer, and H&R Block charge fees for tax returns that go beyond the basic return. These fees can exceed $100 depending on the complexity of your tax return and the services you need.
Electronic filing does not support some filing situations. You cannot attach images or PDF files to your return or file it before the IRS opens electronic filing for the tax year. This typically happens late in January. For example, it occurred on January 23, 2023.
Advantages of Filing Taxes by Mail
Filing a tax return by mail can be very beneficial in certain situations where electronic filing cannot adapt.
If you have a rare filing situation, paper filing may be the best option. For example, you must fill out the form and mail it if you need to file Form 1310 to claim a tax refund owed to a deceased person. Paper filing also allows you to print and submit images or PDF files to supplement your tax return.
If you want to build your tax expertise, filing a paper tax return provides you with the transparency you need if you want to better understand the details of your tax return and review it, including all forms related to your tax situation and the reasons behind them.
Disadvantages of Filing Taxes by Mail
There are several disadvantages to filing taxes by mail that make the process riskier and more challenging than electronic filing.
The likelihood of errors increases when IRS data entry clerks manually enter the taxpayer’s information for each paper return they receive. This can lead to mistakes that require you to file an amended return.
Paper filing can be overwhelming for beginners. Gathering all necessary forms for things like student loan interest, mortgage interest, capital gains, and business deductions can be daunting for filers trying to file paper returns after years of electronic filing. This can also lead to missing forms or making errors.
Remember
Signature of the Declaration. The veteran paper filers understand that the paper return they submit must be signed manually; otherwise, the Internal Revenue Service will not accept it. New paper filers often forget this, leading to a longer than usual delay in processing the paper return.
Tips for Filing a Tax Return by Mail
You can follow some steps to simplify your tax return filing by mail.
Make sure your name and Social Security number are on every page, front and back. Double-check your address. This is where the Internal Revenue Service will send any notices, so it is important not to make a mistake. Send your return to the correct IRS center. The address may change depending on the state you live in and whether you are including a payment with your return. The IRS provides a state-specific list online so you can find the correct address. Obtain an automatic extension if you will be mailing your return close to the official filing deadline. Remember that you must make a payment with the extension if you think you will owe anything. Otherwise, you could be subject to penalties and interest.
The IRS typically accepts paper returns postmarked by the filing deadline. They do not have to receive it and hold it in hand by that date.
Alternatives for Filing a Tax Return Electronically and by Mail
The IRS provides a list of acceptable filing options on its website. These options include:
Hiring a tax professional to prepare your tax return using Volunteer Income Tax Assistance (VITA) or the Tax Counseling for the Elderly (TCE) program if you qualify. There are specific requirements for electronic filing or paper filing if you use any of these programs.
In the case of identity theft where the thief files a tax return using your information, your electronic return will be rejected by the IRS as a duplicate. You must file a tax return
Source: https://www.thebalancemoney.com/should-i-e-file-or-paper-file-3193152
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