The IRS has recently reported a growing popularity and acceptance of e-filing among the general public. It appears that individual taxpayers have become more comfortable and confident in filing tax returns electronically from the comfort of their households.
Total e-filing receipts
Through 5/10/2013 and comparing to the same time last year, the IRS reported a 1.7% increase in total number of e-file receipts. Although it may not sound like a lot, that rise translates to about 1,865,000 more returns submitted electronically.
Tax professionals are still responsible for majority of e-filings, with their share at slightly over 62%, although the growth of the returns e-filed by individual taxpayers has been much greater and increased by 4.4% vs 0.1% by tax professionals (over 40 times the growth rate).
To put the growth in e-filed tax returns in perspective, here’s a different angle:
- Total increase from 2012 to 2013: 1,865,000
- Tax processionals: 36,000 (2% of total)
- Self prepared: 1,829,000 (98% of total)
So in 2013 self-prepared reports have represented 98% of the increase in new e-filings. This may suggest a gradual shift towards computer-based tax filing methods and greater confidence of taxpayers that the software can do a good job in educating and finding all the credits and deductions. Combining that with several pricing options available, swift filing, and direct deposit of refunds and the trend should continue to grow.
A word about refunds
Speaking about tax refunds, this year has been a bit more challenging for taxpayers. Overall, in 2013 the government paid out about $10 billion less and the average refund declined from $2,704 in 2012 to $2,651 in 2013.
The numbers also suggest that taxpayers prefer to have refunds deposited directly in their bank accounts. Here’s how the number of direct deposits breaks down:
- 2013 – 79,880,000 out of total 101,082,000 refunds 79%
- 2012 – 79,308,000 out of total 102,522,000 refunds 77%
Again, even though the change seems insignificant, there is definitely more interest and action in performing transactions electronically.
With that in mind, did you prepare taxes at home this year? If yes, what’s your overall experience?