Licensed CPA firms which prepare eleven or more personal income tax returns are required to file the individual income tax returns that they prepare for clients electronically via e-file as opposed to paper filing. Although most CPA firms have been e-filing tax returns for over five years, each year we still have clients that are apprehensive about filing their returns electronically mostly for fear of having their information electronically transmitted via the internet. There are several advantages to filing your income tax return electronically such as:
- The IRS does not have to re-enter your information into their system when the process the tax return. This decreases the chance of data entry errors by the IRS.
- E-filed tax returns receive acknowledgment from the IRS throughout the filing process. You can get acknowledgement when the return is transmitted, accepted and if it is rejected. Paper filed returns do not receive any sort of acknowledgement.
- Refunds are sent out quicker with e-filed tax returns as opposed to paper filed tax returns.
- E-filing tax returns may be safer from an identity theft perspective. Paper filed returns that are mailed using the post office are sometimes stolen in the mail. Those returns have all sorts of information about the taxpayer such as social security number, bank account information, W2 information, etc.
If the taxpayer insists on paper filing their tax return, it still can be accomplished by filing out a necessary form with the tax return explaining the taxpayers reason for preferring paper filing, but when presented with that situation, we will try to encourage the taxpayer to electronically file their return for the reasons noted above.