That’s the year that e-file was initially introduced. Over the three decades since, the system has changed how we do our taxes – and for the better.
Paper Returns Are Now “Old School”
E-file was originally launched in 1986, and that year just 25,000 returns were filed electronically. Fast forward to 2016 and an amazing 123.73 million out of the 140.25 million total returns were e-filed.
Think about it. Do you know anyone that still files a paper return? In addition to having to fill out all that paperwork by hand and mail it off, paper returns are also susceptible to identity theft. With 91 percent of Americans already using e-file, it’s just a matter of years before paper returns become extinct.
Taxes Are Easier Than in the Past
The number of people choosing to self-file their taxes using e-file is growing every year. Back in 2009, 32.19 million Americans self-prepared their taxes electronically. By 2015, that number grew to 50.37 million.
The reason for this growth is the popularity of the best online tax filing programs, including the widely recognized TurboTax. These programs make filing taxes easy as they walk you through all the steps in preparing a return.
They’re More Accurate Too
Two out of every 10 tax returns filed by hand contain at least one error according to the IRS. Adversely, tax returns filed electronically have an error rate of 1:200. It’s no surprise that many of the best online tax filing services offer free audit protection because they seldom have to use it.
The software used to file taxes has been especially designed to seek out errors on multiple fronts. Not only are calculations flawless, but the programs actively look for problem entries that can potentially flag an audit. Most programs are even smart enough to spot potential data entry errors.
More People Are Getting the Deductions They Deserve
Americans are now able to easily claim many of the deductions they deserve thanks to e-file tax software programs. The average refund in 2015 was $2,792, and part of that is due to the filers using some of the best tax software to prepare their taxes.
When you use a program like FreeTaxUSA, it conducts a tax interview asking you about various aspects of your life. These questions are then used to determine whether you qualify for specific deductions.
In the past, you had to rely on your knowledge of the tax code or the knowledge of your preparer to get deductions. With a pre-programmed database of all the relevant tax codes and deductions, tax software helps Americans get the money they deserve.
Get Your Money Faster
If you prepared taxes in the 1980’s or 1990’s, you likely remember mailing in your return and waiting for weeks and sometime months to get your return. On average, a paper return can take up to six weeks to produce a refund check. E-filing changed all that as you can transmit your return instantly to the IRS and that return is processed in a couple of days rather than weeks.
Direct deposit of refunds also sped up the process. If you e-file taxes and choose direct deposit for your refund, you’ll have your money in 10 days on average.