Hey everyone, I’m Bette Hochberger, CPA, CGMA. Today, I will talk about the differences between e-filing (filing electronically) and paper filing and go into some of the advantages and disadvantages of each one. Let’s jump in!
What is E-Filing?
Electronically filing, or e-filing, is the process of submitting your tax return to the IRS over the internet.
- Faster process. The IRS typically processes electronically filed returns within one or two days. The IRS will also send an almost immediate confirmation when they receive an e-filed tax return. If there was an error, your IRS e-file provider is requ
- Fewer errors. Your tax return must be accurate, so filing your tax return electronically will do the calculations for you. The IRS won’t need to re-enter your tax information in its system.
- Quicker refund! Probably everyone’s FAVORITE advantage to e-filing. E-filing reduces processing time, which can get individuals and businesses their refunds faster (most likely three weeks or less after filing).
- There are limitations. For individual tax returns, you can’t e-file if you need to attach statements or other attachments or if you’re filing decedent returns. You also cannot e-file if you file before it begins (January 28th) or after it ends (October 20th).
- Technology isn’t perfect, so data loss is possible when e-filing.
What is Paper Filing?
Paper filing is sending tax returns through mail.
- Security. Paper filing may have fewer security risks rather than e-filing. Paper filing allows you to avoid entering personal information via the internet. When e-filing, information such as your social security number or address could be at risk.
- Some people aren’t tech-savvy, so paper filing may be easier.
- Longer processing time. Paper filing requires mailing, which can take a longer
- time to process. While e-filing only takes a day or two to process, paper files may take weeks to process. This means that individuals might wait up to 6 weeks to receive their refund.
- Less time to prepare. When paper filing, you must consider the time it takes to prepare and mail your tax return. If you wait too long, you could miss the deadline and experience consequences and interest.
Overall, e-filing is definitely the go-to when it comes to filing your taxes. But again, if you aren’t tech-savvy, paper filing is probably the better option. If you can’t decide which is best for you and need help filing, feel free to reach out and schedule a discovery call with me, and I’ll be happy to help.
I hope you learned something new today. As always, stay safe, and I will see you next time.