How Much Faster Is Electronic Tax Filing?

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According to the Internal Revenue Service (IRS), more than 95 million people e-filed during tax year 2009. There are a number of reasons why many Americans are choosing to e-file in lieu of the traditional paper filing. E-file provides benefits such as security, return receipt confirmation and error checking. In addition, electronically filed returns are processed at a much quicker rate than their paper-filed counterparts, for a variety of reasons.

Filing

Taxpayers who wish to transition from paper filing to electronic filing have a variety of options. Companies such as TurboTax and TaxSlayer charge a fee to process electronic returns, while the IRS partners with companies to process returns for free for low-income filers. Most online service providers allow you the convenience of saving your electronic return so that you can finish it later, and submitting it online. This eliminates the hassle of copying returns and going to the post office to mail your tax returns.

Processing

When returns are processed electronically, the electronic software automatically checks them for math errors before the return is submitted. This reduces the processing time frame for electronic returns substantially, since most paper-filed returns are manually inspected for math errors. In addition, electronic returns compare information from your previous year's return to your current year's return, thereby reducing the likelihood of mistakes involving income, dates of birth and Social Security numbers.

Time Frame

Electronically filed returns are usually processed within 10 days, while the time frame for mailed returns is 6 to 8 weeks. An additional 7 to 10 days is required for mailing the return. The IRS usually receives electronically filed returns within 48 hours and sends an email confirmation to the tax filer.

Considerations

E-filed returns can be filed for businesses as well as individuals. However, e-file is available only for current year returns and not prior years. If you have prior year returns that need filing, you’ll need to download the forms from the IRS website or request them from (800) TAX-FORM. The IRS website maintains tax forms and schedules going back to 1980.

Warning

The estimated time frames for the processing of electronic returns are merely projections and are not intended to be hard and fast guidelines. There are a number of mishaps that could delay the processing of an income tax return. For example, if a tax return is pulled for audit, the processing time frame is often extended well beyond the time frames outlined by the IRS. In addition, if there are questionable items listed on a return, the IRS may contact the taxpayer to request verification, thereby delaying processing.

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