E-file – the secure and accurate electronic filing method established by the IRS some 25 years ago that is now utilized by as many as 99 million taxpayers – officially opened for business on Jan 14.
That means, now’s the time for everyone to get organized. E-file early and you not only avoid the long lines of procrastinators at the post office on April 18th (and the ensuing stress that comes with the territory), but you reap other benefits beyond peace of mind–like these:
Quick Tax Refund
One of the primary advantages to e-filing is that returns are processed in just 24-48 hours. This results in a refund in about 14 days as opposed to up to 6 weeks for a paper return; just 10 days if you don’t itemize tax deductions and use direct deposit.
Direct deposit options
If you’re an e-filer, you can designate up to three financial accounts to deposit your tax refund or use this money to purchase US Series I Savings Bonds. You can even gift the savings bonds to a child or grandchild to help save for college.
According to the IRS, 20% of tax returns prepared with paper and pencil have mistakes; the error rate on returns prepared electronically is just 1%. Furthermore, if there is a mistake on your tax return, the IRS can detect it and send back an error report in as little as 48 hours so that you can quickly fix the problem.
Opportunity to adjust your withholding
File early and you’ll likely see that having too much tax withheld from your paycheck. After all, 2 out of 3 taxpayers got a refund last year and the average refund was nearly $3,000. It’s better to adjust your tax withholding and get this money – about $250 a month! – as you earn it than to give the government an interest-free loan.