Why Not E-File Your Tax Return This Year? You'll likely save time and money--and get any refund due you back quicker.

entrepreneur daily

Today, most people are finding they can prepare and file theirown tax returns in minutes, securely, online. Since 1986, whene-filing began with just 25,000 tax returns filed online, thenumber of e-filed returns has risen exponentially, with more than68 million individual returns e-filed in 2005--that's more than50 percent of all returns.

The backbone driving this trend is the IRS' E-File (or"electronic filing") system. E-file is the way to fileyour taxes directly with the IRS. For more and more Americans,it's become the quick, easy and smart way to get your taxeswhere you want them to be--done!

E-filing online offers several real and practical advantagesthat help explain its growing popularity:

  • Lower cost. Tax returns can be preparedwith web-based tax software and e-filed for tens of dollars. Manycompanies offer free use of their tax software and only charge asmall fee to e-file a return. Complete e-file packages range fromabout $10 for short-form (1040A and 1040EZ) services to about $50for long-form (1040) tax services. Using a paid tax preparer is atleast twice as expensive. According to a report by the BrookingInstitution, the national average for a paid tax return is about$100.
  • Easy and convenient. With web-based taxes,there's no software to download or install. Using a secureaccount, internet pages lead you step-by-step and verify the math.Because the tax software is web-based, a user can access theirsecure account and work on their tax return wherever and wheneverthey access the Internet. No more last minute trips to the PostOffice--just hit Send. Once completed, the IRS provides an officialacknowledgement that the tax return was received. If you owe money,you can authorize an electronic funds withdrawal from your savingsor checking account or use a credit card.
  • File in minutes. About 70 percent of allindividual tax returns use "short" tax forms (1040A or1040EZ). Studies conducted by the IRS suggest that more than tenhours are needed, on average, to prepare a 1040A tax return usingpaper forms. Meanwhile, several e-file companies report that peopleusing online tax software prepare and file their short-form taxreturns in under an hour. One company reports that about 50 percentof their online tax software customers completed tax returns, inone sitting, in under 30 minutes.
  • Refund in days. With IRS e-file, you canreceive your tax refunds in about half the time, compared to paperfilers, or even faster by having your tax refund directly depositedinto your bank account. With e-file, you can get your refund innine to 15 days. With paper forms, you can hope to get your refundin three to six weeks.
  • Greater accuracy, fewer errors. E-File taxsoftware greatly reduces the chance for errors. You're lesslikely to hear from the IRS down the road because e-filed returnsare automatically checked for accuracy--and they've been foundto be 99 percent accurate. If errors are detected, you (or your taxpreparer) will receive an electronic message indicating the errorand you'll be allowed to correct the mistake and resubmit thetax return without penalty. Conversely, the IRS reports up to a 20percent error rate in paper tax returns. Also, those using paperforms are more likely to receive an IRS penalty or have theirpayments misapplied.
  • Socially responsible. By using e-File,you're helping to save resources now and for futuregenerations--less paper, less time, less energy. It's a moreefficient, friendly way to prepare and file your tax return.
  • Peace of mind. After e-filing your tax return, the IRSprovides an official acknowledgment of your return--you'll getconfirmation within 48 hours that the IRS received it. This issomething you don't get with paper-form tax returns. And e-fileis secure: The IRS reports that e-file transmissions are absolutelysecure, and IRS E-file meets or exceeds all government securitystandards.

Research shows that more than 80 percent of taxpayers who'vetried e-file are "very satisfied" with the benefits ofIRS E-file. Eighty-three percent of individual taxpayers who useIRS e-file remained loyal and e-filed the following year.

Getting started with IRS E-file is easy. The IRS maintains alist of authorized E-file Partners and authorized e-file providersat their site.

Scott Cronk is president of www.Taxhead.com, an online tax softwarecompany.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Side Hustle

This Gen Zer's Stylish Side Hustle Earns About $20,000 a Month and Paid Off His Parents' $200,000 Debt: 'I Enjoy the Hands-Off Nature'

Ray Cao went from working as a barista for $8 an hour to being a successful seller on online marketplace StockX.

Data & Recovery

You Could Pay Millions in Fines for Not Adhering to New Compliance Regulations That Take Effect This Year. Here Are 6 Strategies to Keep Yourself in Check.

New or evolving rules and regulations are a fact of corporate life. How employees embrace these new rules — and associated education and training processes — can make a big difference to organizational performance as well as the financial bottom line.

Business News

MacKenzie Scott Donates $640 Million to Non-Profits After Elon Musk's 'Ex-Wife' Comment on X

The winning applicants span 38 states, Washington, D.C., and Puerto Rico.

Living

Want to Succeed? Learn to Say 'No'

As a first-year founder and entrepreneur, saying "yes" to every opportunity can hurt your chance of survival.