Going Paperless: The How and Why of e-Filing

Although many taxpayers still mail their returns, electronic filing (usually using online tax filing services) is becoming more popular.

Benefits of filing taxes online

The IRS expects the number of individuals filing taxes electronically will grow to record numbers this year. E-filing offers:

  • Faster refund – Electronic filing is faster to process, which means a faster refund.
  • Accuracy – Although it may not prevent all mistakes, e-filing is software-based, so it's able to check quickly for errors and scan for missing information. In fact, the IRS has reported that e-file returns are more accurate than paper ones.
  • Early filing – Taxpayers may e-file early, just as they can with paper returns. (The online tax filing deadline is the same.) The sooner you e-file, the sooner the IRS will send you any refund you are owed. The difference, however, is that with early e-filing, it is not necessary to pay the balance of any taxes you owe until the filing deadline.
  • Federal and state filing – In most states you can e-file both federal and state tax returns with the IRS at the same time.
  • Proof of filing – The IRS will send you an acknowledgement when they have received and accepted your return.

How to file taxes online

If you had your return prepared by a tax professional, you probably authorized that person to file it for you electronically. If you used tax software or an online preparation service, follow the instructions you receive there. For more information, visit http://www.irs.gov/Filing/Filing-Options.

Do I still need to mail anything?

When you e-file, you don't have to send in your W-2, W-2G, or 1099-R. However, you do need to show these forms to your tax preparer if you use one, and it's important to continue to maintain copies of these forms for your records.

In addition, most taxpayers can file a totally paperless tax return by using the Self-Select PIN, a five-digit code you choose yourself. It acts as your electronic signature, so there are no forms to sign or mail in. Your tax software, online service or tax professional will guide you through the process of selecting your PIN.