When you file your taxes, you have two options for submitting your return with the Internal Revenue Service (IRS): electronically or by mail.
Both methods of filing have their pros and cons. E-filing is safe, faster, and generally more convenient than paper filing. Filing by mail can be cheaper, though it takes the IRS longer to process refunds.
Learn more about choosing how to file your tax return.
The IRS announced in 2020 that it can now accept e-filed amended returns, but only for tax years 2019 and forward.
Advantages of E-Filing
E-filing was first introduced in 1986, and it got off to a slow start. A scant number of tax professionals—five of them, according to the IRS—took advantage of this new technology at the time.
The new filing method eventually caught on though, and, as of 2020 approximately 90% of taxpayers were e-filing their returns.
The biggest benefit of electronic filing is that you'll receive almost immediate confirmation that the IRS has received your tax return.
If the IRS finds errors in your return, you'll receive a rejection notice (usually within 24 hours), which will typically indicate what triggered the action and what you can do to fix your tax return.
Check the email you have on file with your tax prep software or service provider to catch any notifications that the IRS accepted or rejected your return.
E-filing is more secure than paper filing, according to the IRS, because the return, with all your sensitive information, is transmitted directly to the IRS computer system.
Your refund is likely to be processed sooner, because e-filing means the IRS doesn't have to sort or transcribe your tax return at its service center.
Less Human Error
There's a lower chance that the IRS will make a mistake when processing your return, because IRS employees don’t have to manually enter your return into its system line-by-line.
Skip Tax Prep Programs
You don’t have to use an expensive tax preparation program to e-file your taxes—if you’re tax savvy, have a simple situation, and are willing to learn, you can fill tax forms in directly using IRS free fillable forms.
You should be comfortable completing basic tax forms to use the service, as no guidance is provided. And if your adjusted gross income (AGI) is less than $72,000, you may be better off using one of the IRS’s many free-file affiliates.
Disadvantages of E-Filing
E-filing comes with some potential headaches, too.
While there are tax prep tools that are free, many of the leading tax prep firms, like TurboTax, TaxSlayer, and H&R Block, charge fees for tax returns that go beyond a basic filing.
Fees can exceed $100, depending on which type of features you want.
The IRS publishes a yearly list of Free File Alliance partners that will file your return for free. To qualify, your AGI must be lower than $72,000 (though some free-file providers cap income eligibility at $39,000), and you may have to meet an age requirement.
Vulnerable to Outages
Glitches are always possible when you’re using the internet. In 2020, TurboTax’s website experienced at least seven outages between April 15 and April 17.
Your internet service provider also may face outages that could hamper your filing attempt.
Doesn’t Allow for Certain Filing Situations
Though e-filing supports most tax situations, there are certain scenarios it doesn't support. For example, you can’t:
- File a return for someone who has passed away
- Attach images or PDFs to your return
- File before the IRS opens e-filing for the year
Advantages of Paper Filing
Filing a paper return can be very helpful in certain scenarios that e-filing cannot accommodate:
You Have a Rare Filing Situation
E-filing can only do so much. For example, if you need to prepare a tax return for someone who passed away, you must file a paper return. Paper filing also allows you to print and submit images or PDFs to supplement your tax return.
You Want To Build Your Tax Expertise
Many online tax prep tools automate the filing process by asking you questions and using your answers to fill out forms without ever telling you which forms it’s filing on your behalf.
If you want to learn about, and better review, the details of your tax return, including all forms related to your tax situation, filing a paper return provides the transparency you need.
You can fill out each form line-by-line and see first-hand all the calculations and considerations your refund requires.
Some refundable credits, like the Earned Income Tax Credit (EITC), increase with your income, up to a point. If your earned income was higher in 2019 than in 2020, the IRS is allowing you to use your 2019 income amount to determine your 2020 EITC credit. The American Rescue Plan also expanded eligibility for the EITC in response to economic hardships caused by the COVID-19 pandemic, so you may be eligible this year even if you were not in previous years.
Disadvantages of Paper Filing
There are several drawbacks to paper filing that make the process riskier and more challenging than e-filing:
Increased Chances of Errors
Data transcribers at the IRS must manually input taxpayer information for every paper return they receive. This could result in errors that require you to file an amended return.
Overwhelming for Beginners
For filers who try paper filing after years of electronic filing, gathering all the forms necessary for things like student loan interest, mortgage interest, capital gains, and business deductions can be intimidating. This could lead to mistakes or missing forms.
You Need to Remember To Sign the Return
Veteran paper filers realize that you have to manually sign the paper return you submit, or the IRS won’t accept it. Novice paper filers often forget this fact, leading to even longer delays than what is normal with a paper return.
Tips for Paper Filing
You can do a few things to streamline your return submission when you file by paper:
- Make sure your name and Social Security number are on every page, both front and back.
- Double-check your address. This is where the IRS will send any notices, so it's important that you don't make a mistake.
- Mail your return to the right IRS service center. The address can change, depending on which state you’re in and whether you’re including payment with your return. The IRS provides a state-by-state list online so you can find the correct address.
- Get an automatic extension if you're mailing your return close to the official filing deadline of May 17, 2021. Keep in mind that you should make a payment with your extension if you think you'll owe anything. Otherwise, you could be subject to penalties and interest.
In 2021, most taxpayers receive an automatic extension on filing and paying their taxes. All individual tax returns are due on May 17, 2021 rather than April 15. And both individuals and businesses in Texas, or other areas impacted by winter storm emergencies, have until June 15, 2021, to file taxes that usually are due on either March 15 and April 15.
The IRS will generally accept paper filings postmarked by the filing deadline—it doesn't have to receive it by this date.
Alternatives to E- and Paper Filing on Your Own
The IRS provides a list of acceptable filing options on its website, which include the following options:
- Hire a tax professional to prepare your return.
- Use the Volunteer Income Tax Assistance Program or the Tax Counseling for the Elderly program if you're eligible. There are specific requirements for e-filing or paper filing if you use either of these programs.
In the unlikely event that your identity is stolen, and the thief files a tax return with your information, your own e-filed return will be rejected by the IRS as a duplicate. You must file a paper tax return in that case and mail it in with Form 14039, the “Identity Theft Affidavit,” notifying the IRS of the issue.
- E-filing is fast and provides several free options.
- Internet or website outages can cause frustrating delays for e-filers.
- Paper filing requires more time than e-filing and can be overwhelming.
- Alternatives to filing taxes on your own include hiring a tax professional or participating in filing-assistance programs.
The information contained in this article is not tax or legal advice and is not a substitute for such advice. State and federal laws change frequently, and the information in this article may not reflect your own state’s laws or the most recent changes to them. For current tax or legal advice, please consult with an accountant or an attorney.
Frequently Asked Questions (FAQs)
Who can e-file taxes?
Most taxpayers are eligible to file electronically. However, in some cases, you may have to file by mail. Here are a few examples:
- You, your spouse, or one of your dependents doesn't have a valid Social Security number.
- Someone already claimed a dependent you are trying to claim.
- You're married filing separately and subject to community property rules.
- Your return requires forms that can only be filed by mail.
- You have someone with power of attorney and require the refund to be sent to a third party.
When is the earliest I can e-file my taxes?
The IRS usually announces the first day it will accept returns sometime in January of each year. That date usually falls sometime in February. You might be able to pre-file through a tax preparation service or electronic filing software, but they will hold your return until the first day the IRS begins accepting them.
How long does it take to get my tax refund?
The IRS says most e-filed tax returns with direct deposit take 21 days or less to complete. If you file by mail, it could take up to six weeks. Filing electronically and accepting your refund by direct deposit is the fastest way to do your taxes.