Why should I pay to e-file?

Okay, I just finished doing the taxes for 2005. Woohoo!

But every year, I’m faced with the same dilemma: The IRS’s bizarre position on e-filing taxes. I can see why the IRS would want me to e-file: it saves them big bucks in data entry. But why should I want to e-file? After all, it costs $15 — much more than the cost of paper, ink, and postage for printing and sending via mail. So why should I pay to do them a favor? Here’s what the handy-dandy brochure the IRS sent me says:

Accuracy — e-file greatly reduces the chance of getting a notice from the IRS

I have a couple responses here. First, really? Has anyone verified this? And second, that’s just sad. You mean the IRS can’t get its act together enough to correctly enter taxpayer data? Finally, is this an extortion racket? Is the IRS really that desperate to save data entry dollars that they’ll literally threaten you with an audit if you don’t e-file?

Security – Your privacy and security are guaranteed

Ummm… how, exactly? If identity thieves get a hold of my private financial data and charge up a $10,000 credit card bill, will you cover it? And how is it more private and secure than the US Mail? Is there something Dubya isn’t telling us about his surveillance programs?

Fast Refunds – You receive your refund in half the time, even faster with Direct Deposit

Okay, I’ll remember that next century when I’m actually eligible for a refund. What’s more, a thumbnail calculation suggests that even then, assuming a 6 percent interest rate and a $10 difference between the cost of e-filing and mailing, if I get my refund a month sooner, the refund would have to be over $2000 to be worth it.

Proof of acceptance – You receive an electronic acknowledgement within 48 hours that the IRS has accepted your return for processing

Whoopee. As if they wouldn’t let me know if they didn’t get my return.

So, unless I’m expecting a refund of over $2,000, there’s absolutely no incentive other than my lack of confidence in IRS data entry processes to motivate me to e-file. Here’s a better idea, IRS: how about giving e-filers a $50 tax credit? Surely your data entry on a typical tax form costs more than that. If that’s too rich for you, I’d do it for the $15 I’d have to pay the folks at TurboTax for the “courtesy” of e-filing for me. Until then, you’ll get my return the old fashioned way: via the U.S. post office.

This entry was posted in General. Bookmark the permalink.

4 Responses to Why should I pay to e-file?

  1. Michele says:

    I couldn’t agree with you more. I hate the fact that you can’t e-file your taxes for free. And the rigamarole I had to go through to even get paper forms and find the address to begin with? Don’t get me started.

  2. dave says:

    Hey, welcome back, Michele!

    I just got back from Staples on a purchasing run for envelopes big enough to hold the forms. I ended up buying a new office chair, so now my cost of paper-filing is going to be substantially more than e-filing.

    But my back will be happier for it!

  3. Jas says:

    I did e-file. It was just convenient, honestly. But I didn’t use TurboTax, I used an online service (I’ve used TurboTax the last three years or so) and saved a little money. No cost for the software, and only $6 to e-file.

    I did it because, a) we did get our refund quickly (less than a week) and b) our forms are simple enough to do quickly online, and complex enough to warrant something more than a 1040A.

    First, I think I’d ask the folks at Intuit why exactly they feel the need to gouge their customers an extra $9 over the low-cost leaders in online processing.

  4. dave says:

    Good points, Jas — perhaps some of my ire should be directed at the TurboTax folks. TurboTax is also very opaque about their e-filing costs. It’s not until very late in the game that you learn what you’re going to be paying. That said, I’m not especially comfortable using an online service, even though my “privacy and security are guaranteed.”

    If there was a way to use TurboTax to do my taxes, then use a different service to e-file, that might be appealing, but again, even for $6 it still costs more than what I spend on ink and postage.

Comments are closed.