Most tax filers are owed a refund when they submit their 1040 form. And for many, that refund is a substantial one. In fact, the average tax refund in 2018 was $2,881. That's a lot of money. And during these turbulent times, you may need that cash to cover the bills or shore up your emergency fund.
If you're owed a refund and haven't yet filed your taxes to collect it, you need to be smart about how you submit your return. In fact, there's one key thing you want to avoid: filing a paper return, rather than filing electronically. That's because sending in a paper form is likely to leave you waiting for months for your money.
Here's why it could take months to get your refund if you don't e-file
In April, the IRS released a statement urging taxpayers and tax professionals to submit tax returns electronically because the IRS is not able to process paper returns due to coronavirus-related closures. The agency has indicated they won't even start processing paper forms until their processing centers can reopen. And this will likely take time.
An estimated 30,000 IRS employees were placed on administrative leave during the pandemic. And while the IRS asked 11,000 employees to volunteer to return to work in April, they fell short of getting that number. Another 11,000 were asked to return to work on June 1, but the National Treasury Employees Union is urging flexibility for parents who have children at home, as well as for employees who may be classified as high-risk. With many employees apprehensive about the dangers presented by working in office, it's not clear yet if the IRS will meet this target.
And even as IRS staffing numbers increase, there's a huge backlog of work for returning employees to do. As of mid-May, a report to the Ways and Means Committee revealed there were already 10 million pieces of mail waiting for them, including an estimated 4.7 million tax returns to process. Going through all that paperwork won't be quick. And if you still have yet to file your return, it will be on the bottom of the pile.
E-filing your taxes is easy. Here's how to do it
The good news is, you can avoid the lengthy delays associated with filing a paper return by submitting your forms electronically. If your earnings are $69,000 or less, you can do this for free with your choice of user-friendly software programs. The IRS provides resources to help you find the right one, as there are differences between them.
If your income is above this limit, you can pay to use one of these programs or just use free fillable forms on the IRS website. These don't make the process as simple as tax software programs, but can be submitted electronically at no cost. If you're used to submitting paper forms that you complete on your own, the free online forms shouldn't be any more difficult.
Don't wait months for your refund for no reason
Since e-filing your taxes is so simple, there's little reason not to do it -- especially this year, when the IRS is taking so long to process paper returns. Get started on working on your forms online today so you can claim your refund and start putting the money to good use.