Tax Tip 2010-07: Three Reasons to Prepare and File Your Taxes Electronically

Last year, 2 out of 3 tax returns were filed electronically. Was yours? If not, here are three important reasons to e-file your return.

1. It's fast
Your tax return will get processed more quickly if you use e-file.  If there is an error on your return, it will typically be identified and can be corrected right away.  If you file electronically and choose to have your tax refund deposited directly into your bank account, you will have your money in as few as 10 days

2. It's safe
The IRS is fully committed to protecting your tax information and e-filed returns are protected by the latest technology. In 20 years, nearly 800 million e-filed returns have been processed safely and securely by the IRS.

3. It's time
Two out of three taxpayers, 95 million, already get the benefits of e-file.

E-file software reduces the chance of making errors when you prepare your return.   However, some people still print the computer generated return and mail it to the IRS instead of hitting the "Send" button.  By mailing the return, taxpayers miss out on some important benefits of IRS e-file.

• With e-file, you get the peace of mind that comes with the electronic receipt you'll receive notifying you that the IRS received your tax return. 
• Virtually everyone can prepare a return and file it for free.  For the second year, the IRS and its partners are offering the option of Free File Fillable Forms. Another option is Traditional Free File.  About 98 million taxpayers - 70% of all taxpayers - are eligible for the IRS Traditional Free File.  Traditional Free File is a service offered by software companies and the IRS in partnership to provide free tax preparation software and free filing. 
• E-file is available 24 hours a day, seven days a week, from the convenience of your own home. 
• If you owe money to the IRS, e-file also allows you to file your tax return early and delay payment up until the due date.
• In 37 states and the District of Columbia, you can simultaneously e-file your federal and state tax returns.

Find out more about E-file at IRS.gov.

Posted by Joshua Hock, Associate Editor, The Wealth Strategies