Disadvantage of Electronic Filing

The IRS has some legal restrictions that might prevent you from e-filing at all.

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E-filing your taxes might appear to be the easiest, most convenient solution, but sometimes appearances can be deceiving. A few disadvantages associated with e-filing might make you think twice the next time you are filing a tax return. By knowing the cons of filing and not just the pros, you can choose which method is right for you.

Identity Theft

Although online tax software is secure, your own computer might provide an opening for a thief to steal your identity while you're filing your taxes online. A virus or malware on your computer could grab passwords or financial data. If you use a tax program in an airport, WiFi hotspot or other public location, your computer needs a strong firewall to keep others from accessing your information. Make sure to keep your security and antivirus software programs updated in order to avoid identity theft issues.


While filing by mail only costs the price of a stamp, e-filing can be more expensive. Tax filing software can be expensive and the price increases if you have to file state taxes or business taxes. The IRS offers a free online filling service, but it is only available to people who have an adjusted gross income of less than $57,000 a year.

Complicated Tax Forms

Although online tax programs that provide e-filing may be the most efficient methods, they may not be the best choice if you have a unique situation or a complicated tax return. If you own many types of investments or are part of a corporation, for example, your tax return may involve many finely detailed laws that tax software just is not sufficient enough to cover. Trying to get help on a complicated tax question from a website help desk may not be nearly as useful as getting help from an in-person tax professional.

Computer and Internet Glitches

Software glitches and Internet issues can cause unexpected problems for people who file electronically, especially if they wait until the last minute. Tax websites are typically swamped on the last day and could experience system slowdowns or errors. In addition, if your computer breaks down and you're filing the night taxes are due, you might be out of luck. Problems can also happen after filing. In 2012, a glitch in the IRS software delayed refund payments only to taxpayers who filed online.

Not Fileable

Sometimes you might pay money for tax software and spend time preparing your taxes to be filed electronically, only to find that you're ineligible to e-file. This can happen due to user error or other more serious issues. The IRS and state governments do not allow certain types of taxes to be e-filed, such as returns without any taxable income, prior-year tax returns or more than five tax returns filed using the same tax software.

Choosing to File by Mail or Online

Of course, there are advantages to filing online also, such as having fewer errors because the errors are caught quicker by the tax software. It is up to the individual taxpayer which method is best for his particular situation. You may choose to enlist the help a tax adviser or a financial planner when deciding which method is right for you.

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About the Author

With features published by media such as Business Week and Fox News, Stephanie Dube Dwilson is an accomplished writer with a law degree and a master's in science and technology journalism. She has written for law firms, public relations and marketing agencies, science and technology websites, and business magazines.

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