Do you e-file your taxes?
According to the IRS Newswire Issue IR-2007-065,
… taxpayers are continuing to electronically file their tax returns at a record pace, up more than 5 percent from the same period last year.
‘Taxpayers are filing electronically at a record pace this year,’ said IRS Commissioner Mark W. Everson. ‘We encourage people to consider e-file and Free File as the tax deadline approaches. E-file reduces taxpayer errors and gets refunds back quickly.’
Now, that’s funny. For many people, e-filing does NOT come free while it actually saves the IRS money. So the IRS should actually arrange for e-filing to be provided free for all or to give incentives for the tax payer to e-file.
Next, if you are expecting a refund, you haven’t done your finances right. You should always adjust your withholdings to not have a refund; otherwise, you are simply giving an interest-free loan to the government.
Therefore assuming that you have done your finances right and are paying taxes for the previous year, there is no reason to e-file and then getting the money deducted from your bank account earlier.
So, no thank you, I will send in my tax return mid-April through the good old United States postal service and have the IRS take the money out from my bank account when they process my paperwork.
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Stumble it!
March 22nd, 2007 at 3:44 pm
Well, they do not deduct your account any earlier if you e-file. You can pick the date on which it happens. It can be any day till April 17 this year.
With sites like http://www.taxact.com, e-filing is indeed free for most people (at least for Federal taxes).
There really are no good reasons left for not e-filing.
March 22nd, 2007 at 3:52 pm
If it is free, I am OK with e-filing. Unfortunately, I don’t think there is any free e-filing for state taxes.
But still, if I send in the paperwork on 4/17, the money will be deducted from my bank only about two weeks after 4/17. Still beats 4/17, but you do have to pay the postage. Oh well…
March 30th, 2007 at 1:58 pm
I agree. I owe taxes and even though I use TurboTax to complete my return, I will send in my taxes in a good ol’ paper envelope. I’d think if you owe them money, at least they would want to make e-filing free. Dumb gobmint.
In Virginia we have a web site to e-file our state taxes at no charge. Funny how TurboTax never seems to mention that one.
Stay invested
April 7th, 2007 at 10:51 am
You’re right. Getting a refund is sub-optimal, and if you owe money there’s no sense in paying a fee to hurry up the payment.
But…life is a tradeoff. I’m rarely able to juggle my various factors to ensure that I don’t get a refund at the end of the year (real estate investments, a limited liability company, other issues) and with all the other complications gumming up my life I like the convenience of e-filing.
So does it make sense to give the gobmint (good one, Paul) a tax free loan or to e-file. Well, no. But for me it’s a convenience worth paying for.
April 7th, 2007 at 4:56 pm
Hi Christopher, I agree with you too; sometimes it makes sense to trade-off some lost interest for convenience.
April 8th, 2007 at 8:10 pm
I file electronicaly and use The Electronic Federal Tax Payment System (EFTPS) through which you pick the date for your payment to be deducted from your bank account. The date and amount of each quarterly tax payment is also set up in advance, as you desire.
Using this system takes me a couple of days in February each year to deal with taxes, and then I forget about it for a year and all payments are made automaticaly on the last possible day in accordance with the schedule I submit electronicaly.
April 11th, 2007 at 10:38 pm
[...] I have never been a big fan of using online tax filing services. Your private information is stored online and you have no control over who can access it. And if [...]
April 22nd, 2007 at 8:44 am
You can have best of both worlds! I used TaxACT Online to file my federal tax free. TaxACT Online allows you to e-file with an option to mail in your paper check via the mail (also, I e-filed my State Tax Free at a website IL Dept of Revenue has).
March 7th, 2009 at 3:49 pm
As a student, I am always searching for online resources that can help me. Thank you!