It’s tax season! Should you e-file your taxes?

Should you go with the traditional paper return method or new electronic method that uses TurboTax or another user-friendly software?  Last year, approximately 55% of 135 million tax returns were e-filed.  Is e-filing the way to go this year? 

Here are the advantages of electronic filing:

1.  Fewer errors at 20% more accurate than paper returns as contended by the IRS.  Most errors on paper are due to incorrect social security numbers or forgetting to sign the form.  The IRS uses electronic scanning and bar codes to turn handwritten forms into e-format.  Sometimes, human error in the process may cause errors.

2.  Messy handwriting or inaccurate numbers by hand may trigger an audit.

3.  Direct deposit makes e-filing quick by receiving your federal reund within a week and half and your state refund within two weeks.  This year, direct deposit lets taxpayers specify up to three accounts that refunds may be sent to, such as checking, savings, and retirement accounts.

4.  Free file, a free software, is offered to lower-income people so they are not forced to hire an accountant.

Well, the motivation to do either is based on which one leads to less errors, and hence less red flags by possible audits.  The electronic route seems to offer faster, more reliable results.  However, if you’re comfortable with the paper return and that has been working well for you, why change good habits?

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