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March 19, 2010 | Posted By: Jim Wang
Did you Efile your taxes last year? If so, good job, you're one of the 90 million who filed your return electronically, according to the IRS. If not, don't fret as you're in good company (40 million filed on paper). But have you considered the awesomeness that is Efiling? Efiling has become more and more popular as people become more comfortable sharing their personal information online. But did you know that efiling may be safer than sending in a paper return? Did you also know that you could get your tax refund (the average tax refund last year was close to $2700) in as few as eight days?
Here are three strong reasons why you should consider efiling this year:
Lost In The Mail
Can you imagine spending hours on a return, mailing it on time, only to discover that it was lost in the mail? It's unlikely, very unlikely if you pay to send it by registered mail, but it's possible and a huge headache. When you Efile, there's still a possibility that your return isn't filed properly, but you'll find out in 24 to 48 hours. When you Efile, you'll be notified of any problems. When you mail it, you won't know until the IRS writes you a letter... and that's not a good thing.
Returns and Refunds Processed Faster
If you are due a refund, Efiling your return and requesting the refund be direct deposited into your bank account is the fastest way. It can take as long as three weeks; but if you have a simple return, you will see the deposit in fewer than ten days. By filing on paper or by requesting a paper check, you add more bureaucracy into the process and it can take as many as eight weeks before you see your own money back. Ten days or eight weeks? If someone owes me money, I want it ASAP so I can put it in a high interest savings account, earning money for me.
Why does filing on paper take longer?
If you send in a paper return, which is unavoidable in certain situations, the IRS will need to manually enter the information into the system. That introduces more time but it can also introduce errors in your return. You write one digit and the data entry person, or the scanner, reads another, leaving you caught in the dark abyss of the process. If it's all in bits and bytes to begin with, you can finish the process much faster.
Efiling Is Encrypted
Your paper return has pretty much every piece of information a thief would need to steal your identity. It has your social security number, your address, you place of employment, how much you were paid, and, if you put in direct deposit information for your return, they have your bank account too. If you mail it at the post office, your probably going to be 99.9999999% safe. If you drop it in your mail, you're probably going to be 98% safe. If you encrypt it and efile it, you're going to be 100% safe. Identity theft affects close to 10 million victims each year, you don't want to be one of them (the mean resolution time is around 25 hours!).
By Efiling, you avoid errors, you avoid identity theft, and you can get your tax refund in as little as eight days. I can't think of any reason why you wouldn't Efile!
Jim Wang, the personal finance guru behind Bargaineering.com is actually a longtime, well-respected, and famous member of the FatWallet community. Jim is one of the experts in the finance forum and has been sharing knowledge and helping people out for almost 10 years. You may also connect with Jim on Google+.
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