Most recently, the IRS has started pushing something that will finally benefit the taxpayers as much as it benefits the agency - electronically preparing and filing your income tax returns. For the first time, the IRS has even began offering electronic options for paying your taxes. In addition to the option that you as a taxpayer have had for years of having your refund directly deposited into your bank account, if you file your taxes electronically and wind up owing taxes, you will now have the option of making a direct deposit to the IRS or using your credit card.
There are a number of beneficial aspects to preparing and filing your taxes electronically. There is no better way of cutting down on the number of errors on your return than filing it electronically. According to the IRS, over 20% of returns prepared on paper have errors, mostly from miscalculations. Only 1% of taxes prepared electronically have had errors. As errors on a IRS extension form can be time consuming, cost you money in tax dollars and sometimes even lead to audits, preparing an errorless return is a hot commodity.
Another benefit of filing your taxes electronically is that you are ensured that the IRS has received your form and on time. It isn't so very difficult to imagine that the tax return that you mailed out on time is lost or misplaced for sometime in the mail system or at the IRS itself and either never gets processed at all or shows up after the deadline. You never know that its been lost and months later you start receiving letters from the IRS demanding your return, penalties and interest. You may be left with no proof that you did indeed send out your return and on time. Electronic filing is the only way to avoid the entire nightmare. When you file electronically, you receive verification that the IRS has received your return.
Finally, if you are expecting a refund, electronic filing may definitely be in your best interest. The IRS promises to get you your refund twice as fast if you file electronically. Now that's an incentive!
