When it comes to filing taxes, you have a choice: You can keep things old school by writing out a paper return, dragging yourself to the post office, and mailing it out to the IRS, or you can log onto a computer and file your taxes electronically. If you're used to the paper route, that may be your preference this year. But here's why it pays to submit an electronic return instead.
1. You're less likely to make an error
Even if you use a calculator to figure out what numbers to put on your tax return, when you fill one out manually, there's always the chance that you'll make a mistake. And depending on the nature of that mistake, it could cause the IRS to reject your return, leaving you with a headache on your hands. The benefit of filing taxes electronically is that you're less likely to make a mistake. In fact, the error rate for electronic returns is under 1%. For returns filed on paper, it's 21%.
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2. You'll get your tax refund sooner
If you're due a refund from the IRS, chances are, you'd like that money sooner rather than later. This especially holds true if you're counting on that money to pay off some debt, cover a major bill, or simply give yourself a bit more breathing room in your budget. The upside of filing taxes electronically is that you'll generally get your refund much quicker than you would with a paper return. In fact, the IRS estimates that refunds for electronic returns will be processed within three weeks, but that timeframe doubles for paper returns. Furthermore, once your electronic return is received, you'll be able to check your refund status within 24 hours. With a paper return, that data won't be available for about four weeks.
3. You'll avoid missing out on key tax credits and deductions
When you file taxes on paper, you'll get an opportunity to claim credits and deductions that lower your tax burden -- that is, if you know about them. A paper return won't prompt you to claim tax breaks you don't already know about. An electronic return, however, will, so if you go that route, you could end up saving yourself more money than expected. For example, you may have an easier time itemizing your deductions on an electronic return, which could prove more lucrative than sticking with the standard deduction. And you're less likely to miss out on valuable tax credits that directly lower your IRS liability on a dollar-for-dollar basis, like the Child Tax Credit, Earned Income Tax Credit, or Child and Dependent Care Credit.
Make your life easier
There are so many benefits to filing your taxes electronically, and doing so is probably easier than you'd think. And that way, you don't have to worry about your taxes getting lost in the mail. You can simply sit back and point and click your way to getting your taxes done with.
