Tax Tips: The benefits of e-filing your tax return
For the Nevada Appeal
The IRS recently published some interesting statistics. In 2001 when they started the e-file (electronically filing over the Internet instead of mailing via the U.S. Postal Service) program, almost 31 percent of all tax returns filed were done via e-file. In 2010, that percentage had risen to almost 70 percent – 98,740,000 e-filed returns in 2010 to be exact.
In 10 years, this novel experiment has become so much the norm that this year, the IRS will not be sending out any tax forms in the mail, just a postcard telling you how to get the forms … mostly over the internet. (You can request them to be mailed to you, but you now have to tell the IRS to do so.)
Some of the benefits of e-filing are that the IRS doesn’t make errors entering your tax return into their computers, thus eliminating a lot of erroneous IRS letters. Another is that the IRS is saving the cost of all those people manually entering your tax return information into the IRS computers.
Also, it’s good for the environment due to the mountains of paper no longer being destroyed after your paper return has been entered into the IRS computers.
All that postage in mailing out forms and then you mailing them back to the IRS is no longer being paid to the U.S. Postal Service. I guess you could say now maybe at least one branch of the federal government dislikes the IRS almost as much as the rest of us.
Another interesting statistic from the IRS: Last year, almost 77 percent of all tax returns filed had a refund. Sixty-eight percent of those refunds were direct deposited rather than having a check issued in the mail. The average refund amount was $2,994. The average refund direct deposited was about $200 more.
Something the IRS didn’t emphasize is that if you choose to receive your refund via direct deposit, it usually comes about four weeks faster. It is also easier to have immediate access to the funds. (Imagine your refund check came on Friday and you found it in your mailbox too late to get to the bank. You would have to wait until Monday and drive down to your bank to deposit it. Some banks don’t make deposits immediately available, so there might be a 24- hour hold on that deposit. Thus, you might go 72 hours from receipt of your refund check until you could access the money.)
Total refunds paid out by the IRS this year were $326 billion. That means that the U.S. government managed to borrow that much money interest free from all those taxpayers for a year! If you were one of those who got a large refund, you were part of making an interest free loan to our government. You helped save almost $11 billion in interest on the federal deficit.
• Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 882-4459.