The Big Reason You Shouldn’t File a Paper Tax This Year

In case you missed the news, the IRS has extended this year’s tax filing deadline a month, giving tax filers until May 17 to not only submit their returns, but also pay all tax debts due from 2020. If you haven’t started working on your taxes, it might be beneficial to do so on as soon as possible. Although you now have an extra month to complete the task, the sooner you file a return, the sooner you will get your refund owed to you.

That said, if you’re used to filing a paper return, now is not the year to do so. And if you go this route, you could end up significantly delaying your repayment.

IRS is still in catch-up mode

Last year, the IRS closed several of its offices in response to the coronavirus outbreak. And now he’s grappling with a huge pile of unprocessed 2019 returns.

Image source: Getty Images.

At the end of 2020, the agency was facing a backlog of nearly 12 million paper declarations, according to a report by the Inspector General of the Treasury for the tax administration. This means that many people who filed their taxes on time last year can still wait for their refund, so if you want to avoid a significant delay in this year’s refund, it would be wise to file electronically.

Paper tax returns must be processed manually – and for this reason, the IRS typically takes twice as long to reimburse paper returns as electronic returns (six weeks versus three weeks in a normal tax season). But given the current backlog, if you file on paper this year, your repayment could take much longer than six weeks. If you’re having financial difficulties (whether it’s because of the pandemic or some other reason), the last thing you want to do is delay the arrival of that money.

The problem this year is compounded by the fact that the IRS is also responsible for sending dunning checks under the recently passed $ 1.9 trillion coronavirus relief bill. While many of these payments are made electronically, the agency still has to issue bundles of paper checks and debit cards to recipients who cannot obtain these funds through direct deposit. It’s unclear to what extent this process monopolizes the agency’s limited resources, but given that the IRS has another monumental job to do, now is not the time to file a paper return.

Not only will filing your taxes electronically help speed up your refund, it could also help you avoid mistakes. And it may be easier for you to identify the different tax credits and the deductions to which you are entitled, from educational expenses to pension plan contributions.

Better yet, if you have an income of $ 72,000 or less, you will be eligible to file electronically. free This year. And having software that does all of your math for you can make the process of paying your taxes a lot smoother from start to finish.

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