Electronic Filing Speeds Tax Refund
Electronic tax preparation and filing speeds refund, cuts down on errors
A tip for taxpayers who want to see their refunds faster: File electronically.
That advice from the Internal Revenue Service could come in handy for people in economic straits. Last year, the average refund was $2,429.
The number of returns filed electronically has more than doubled over the past 10 years. Last year, nearly 90 million — about 58 percent — of the more than 155 million tax returns were filed electronically. The IRS expects that number to increase this year.
If you file electronically and choose direct deposit, your refund will be in your bank account in 10 days. "When you go the paper route, it can take four, six weeks, even longer to get that paper check in there," said IRS spokesman Terry Lemons.
The IRS says about 66 million refunds were direct-deposited last year, up 8 percent from 2007.
If you owe money, you can pay your tax bill through direct electronic withdrawal from your bank account or by credit or debit card. Even if you file early, the payment isn't due until the April 15 tax deadline.
In addition to quick receipt of a refund, there's another advantage to filing electronically: The most common errors on tax returns are mathematical, Lemons said.
Tax preparation software programs do the math for you. They guide you line-by-line through tax forms and point out any errors. And they remind you to check for any updates to the form.
So if filing electronically seems like a no-brainer, why do many people still file the old-fashioned way?
"Some people just like to do it all by hand," Lemons says. "That group is diminishing rapidly."
Other people buy tax software, fill out the forms on the computer, then print it out and mail it in. "They don't want to have any of the fees with electronic filing," he said.
This year, the IRS plans to expand its Free File program, and some of the the tax software companies are eliminating fees. TurboTax, for example, will let you electronically file five federal returns free when you purchase the boxed software program. Same with TaxCut 2008, H&R Block's software.
