Why 2023 Should Be the Year You Stop Filing Paper Tax Returns

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There are a few reasons why it pays to file electronically instead. 

Many of us tend to be creatures of habit. We find foods we like, and we consume them regularly. We find a route that’s convenient to work, and we continue to take it, even if there’s a way to shave a few minutes off.

Along these lines, if you’re someone who’s used to filing your taxes on paper, then that’s a habit you may be inclined to uphold in 2023. After all, if it’s always worked out well for you, why change it?

But 2023 is actually a pretty bad year to be filing a tax return on paper. Here’s why.

1. Paper returns take longer to process in general

It typically takes the IRS 21 days or less to process electronically filed returns. With paper returns, the normal turnaround time is twice as long.

But here’s why that’s a problem today. Most people who file a tax return wind up being owed a tax refund. Meanwhile, inflation has been surging since the latter part of 2021, and that’s caused a lot of people to fall behind on bills and struggle financially. And seeing as how a tax refund represents money the IRS owes you already, it’s in your best interest to expedite that refund as much as you can.

If you file your taxes electronically and also arrange for your tax refund to get deposited directly into your checking account, you might get it much sooner than you would with a paper return. And at a time like this, that could spell the difference between being able to pay all of your bills on time versus racking up some debt on your credit cards in the absence of having your money on hand.

2. The IRS is starting off this year’s tax season with a backlog

A recent audit of the IRS found that as of late October 2022, the agency still had 9.6 million outstanding tax returns to process. The IRS fell far behind on processing paper returns during the initial stages of the COVID-19 pandemic, when its field offices closed down. But because of that, the agency has a lot of catch-up work on its hands. And while it’s in the process of ramping up on the hiring front, we can expect 2022’s backlog to persist well into 2023.

Now, remember how we just said that the typical turnaround time for processing paper tax returns is six weeks. Well, that time frame may not apply today. If you file a paper return in 2023, it might take the IRS 12 weeks or more to give it a look, thereby delaying your refund at a time when you could really use the money.

If you’ve always filed your taxes on paper, it’s easy to see why you may not be so excited about making a change. But filing electronically could help you expedite your tax refund and get some financial relief. Also, when you file electronically, you reduce your chances of making an error. And that, too, could be your ticket to a quicker refund.

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