Personal Finance

Should I E-File My Taxes Or Mail Them?

This guest post is from PT of PT Money: Real Personal Finance for a Life Without Limits! Check out PT’s latest post about using a joint savings account.

PT is a pretty interesting guy with a blog that you should subscribe to.  He also has a finance rap video which I featured here a long time ago – if you haven’t seen it then I insist that you check it out.

It’s tax time again! What are you going to do this year? Stick with the old school method of filing by mailing in your forms? Or are you going to try this new thing called e-filing (now a 20 year old process)?

Don’t worry. I won’t beat up on you non e-filers too much. There are actually a few reasons why mailing your forms may make sense and even be required. Let’s look at the differences between the process of e-filing and mailing in your forms.

The Traditional Filing Process

Before e-filing was around (pre-1990), everyone mailed their tax forms to the IRS. Even if you use fancy tax preparation software, you can still print out your completed tax forms and stick them in an envelope addressed to the IRS. It’s a simple process as old as the idea of paying income taxes.

What is E-Filing?

Last year, the IRS’s e-file processed 95 million tax returns. That’s 66% of all the returns that were filed. E-Filing is simply taking an electronic version of your tax return and sending it using the Internet directly to the IRS data processing center.

Advantages of E-File

There are many, well noted reasons for e-filing. It’s faster, easier, you get your refund quicker, no trips to the post office, no stamps, less chance for error, and the list goes on. It’s obvious that the case has been made for e-filing. But what about security?

At first glance it might seem less secure to e-file your taxes. After all, you are sending your personal information, income data, and credit card or bank account information from your computer, over the Internet to another computer to be processed. That’s not the kind of data you want to be careless with, right?

But it’s actually less secure to mail your return. Data transferred using tax software to the IRS is going to be encrypted. Plus, both the software companies and the IRS have strict privacy policies that their reputations depend upon. Tax returns get lost or stolen in the mail every year.
One advantage of efiling is that tax software programs such as TurboTax will help you with recent tax changes or new tax deductions which you might not know about yet.
Advantages of Mailing Your Forms

Mailing your return is less expensive than e-filing. There are some people who qualify for free federal tax filing, but most people have to pay a fee to have their taxes e-filed. State e-filing can be especially pricey.

It takes longer. If you owe money on your taxes, the last thing you want to do it rush the job. Wait till April 15th and mail in your paper forms along with a check. Hold your money as long as you can. Mailing will always be the method of choice for those who owe. Especially when the IRS has the nerve to charge a convenience fee for those paying with a credit card.

Who’s Required to Mail in Their Forms?

Lastly, there are some people who have to mail in their tax forms this year. You must file by mail if:

  • You are claiming the first time home buyer tax credit on your 2009 return. Since you have to mail in your closing settlement papers, a physical mailing is required.
  • Another filer has already claimed your dependent as theirs, and you need to dispute this.
  • You have some type of dispute about your date of birth with the SS Administration.
  • You are filing an amended tax return.

So what’s it going to be this year? E-File or Mail? I’d love to hear your thoughts in the comments below…

If you want to read more posts from PT then check out his blog PT Money and consider subscribing to the feed.

More resources

Should I use tax software or do return by hand?

How long to keep tax receipts

18 replies on “Should I E-File My Taxes Or Mail Them?”

I have always mailed my taxes in.
One thing I have noticed is that it get processed much quicker than it used to.
It used to that take a least 6 weeks to get something back,these days it takes
2 weeks tops.
Maybe its because everyone else is e-filing….not sure

Mike, as tax time approaches, I really prefer to see posts about doing Canadian taxes (with Canadian criteria, deadlines, rules, forms, etc.) on Canadian PF blogs. That’s not to say that PT’s article wasn’t good, just that it doesn’t apply to us. There aren’t that many of us Canuck PF bloggers and there are about 3 zillion American ones. So, IMHO, the US ones should have the posts that apply to them and the Canadian ones should have the posts that apply to us.

And, no, I’m not planning a post on taxes myself. I pretend for as long as possible that taxes don’t exist. But if I did want to efile this year (that sentence is somehow akin to “if I did want to have smallpox this year”) I’d like to be able to find out about how the CRA does it on some nice, handy Canadian blog….

Shevy, there will be some Canadian tax posts coming up but since approximately 99.5% of the revenue of this blog comes from Americans, there are going to be some American-based posts as well. 🙂

If you really want to see some more Canadian content on here then feel free to write something and send it in.

[…] Pillars contemplates whether that's the way to go in Should I E-File My Taxes Or Mail Them? Find out which method prevailed at Quest For Four […]

There are a couple of inaccuracies with this post: 1) efiling is less expensive, not more. There are free efiling sites for both federal and state income taxes (for most states), as long as you can keep it down to a 1040EZ or a 1040A. No paper to buy, no envelope to buy and no stamps. Just stay away from the TurboTax and H&R Block websites for the free state filings. Which brings up the other inaccuracy: 2) those services might help you find some new deductions, but on average, I save my clients who need to file more complicated forms several hundred dollars over what they have come up with using those programs.

Denise, I’ve heard that you are more likely to be audited if you e-file.

Chances are they will just ask you to send in copies of the receipts.

E-filing starts on Jan. 17 this year. If I mail my tax forms tomorrow, Jan. 9, won’t this speed up my refund?

Efile process may be easier but still a pain you do not really recieve your refund that fast and we have direct deposit.. Still waiting 10 days now and efile if they ask for proof which they did on ours for moving expenses which we already provided to our accountant and still our return is not processed since we filed it March 6 and now it is March 19 they say they process it within two weeks on efile but if they ask for information you cannot even ask why for another 4 weeks after it is filed who knows what then if they reasses or review it .. So no faster if there is a glitch in your refund on efile at least they do not question if you mail it or have the chance to review it or reasses for another 2 months.. I do not believe the efile system is any faster even if you provide the information to them.. It almost starts you back to square when when you filed..

With Turbo tax, you can e-file your Federal return for free. To e-file your State return costs $24.95. Any reason I shouldn’t e file the fed and and mail in the state especially since I am applying my state refund toward next years taxes anyway

Correction. If you owe you do not necessarily have to file on paper and wait to the last minute as suggested above. You can e-file anytime and then as long as you send in what you owe before the April 15th date, you’re fine.

I agree with the EA comment above. Watch out for hefty charges to file a state tax return using HR Block and Turbo Tax software. Once the federal return is ready, the software asks if you want to do the state return. Almost all the info needed is already typed in so it is convenient. I think some states offer free filing using their website. On a simple return it is not that much work to type the stuff in again.

Can I prepare my federal and state taxes using their software and then print it out to send it in rather than to efile it? If so how do I know if I will be charged anything or is it really free?

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