volume has swelled over its 25 years in existence and over the course of time,
the IRS has safely processed just over 1 billion tax returns. If not familiar, e-file stands for electronic
file which is a method used to electronically send the return versus the 'old fashioned' way of sending a paper return
through the mail.
From a trickle of returns in 1986 to the majority of US personal tax
returns filed in 2011, e-file brings many benefits to the taxpayer. The
IRS states that the e-file error rate is around 1% of tax
returns, whereas 20% of returns filed on paper contain errors. Additionally, taxpayers receive refunds much
faster with electronically filed returns than the paper/mail version. For those interested in our environment,
e-file saves thousands of sheets of paper vs. filing on paper and mailing the
return. And for those concerned about
our government's budget, e-file saves time vs. a paper return that has more
manual entry. Plus, for taxpayers who owe,
they have a new option created by e-file, and that is to file electronically,
but wait until the deadline to 'ink a check'.
Of course, even inking a check can be replaced by other IRS
electronic payment methods.
The next evolution is already rolling out and is called MeF or
Modernized e-file. MeF generates an
acknowledgement within minutes, as opposed to the e-file turn-around of 48
hours. This allows taxpayers to correct
any errors more quickly. In the future,
taxpayers due a refund may receive them in a few short days versus just over a
week if the IRS couples MeF with CADE (Customer Account Data Engine), a new
system scheduled to replace IRS master file tapes.
A handful of situations exist where e-file and/or MeF are not
available. If the taxpayer is not sure
how to file, then they should consult
a professional to
determine the best option. In general,
make tax time simple by electronically filing your return.
Every effort has been taken to provide the most accurate and honest
analysis of the tax information provided in this blog. Please use your
discretion before making any decisions based on the information provided. This
blog is not intended to be a substitute for seeking professional tax advice
based on your individual needs.