How Many People E-File Their Individual Tax Return?

Filing Out Your Tax ReturnAre paper returns a thing of the past? According to the IRS, over 100 million taxpayers filed their individual federal tax returns electronically in 2012. Most of us have forgotten the days in which we searched through large booklets making tedious calculations hoping that they were correct. However, almost 20 percent of taxpayers whom file individual tax returns still submit their tax returns on paper.


Three main benefits of filing your tax return electronically are that they are usually more easy to prepare when using your computer, you get your refund much faster by direct deposit and about three weeks sooner, and probably the most important, e-filed returns typically have fewer mistakes. According to the IRS, almost 20 percent of tax returns prepared on paper have mistakes such as missing information or incorrect tax calculations. But less than one percent of e-filed returns have errors. If there is a mistake on your return the IRS can notify you so that you may fix the problem in a matter of a couple days instead of waiting for a letter in the mail.


Percentage of Individual E-Filed Federal Tax Returns 2000 - 2012As you can see in the graph, 28 percent of the roughly 127 million individual tax returns were e-filed in 2000. We have come a long way since then. In 2012, out of approximately 148 million individual tax returns almost 120 million of them were filled electronically.


Another reason the IRS wants us to file our tax return electronically is that it costs the IRS approximately $3.00 to process a paper return compared to about $0.40 for an e-filed return. This difference of roughly $2.60 adds up when you take into account that last year about 29 million individual tax returns where submitted on paper. That means it costs the IRS about $75 million in extra processing fees.


So, where do you think we’ll be in five or ten years from now? Do you think we’ll ever reach 100 percent?


DataAll data below has been rounded to the nearest hundred thousand and percent.

Tax Year Total Returns E-Filed E-Filed % Paper %
2000 127,100,000 35,400,000 28% 72%
2001 129,400,000 40,200,000 31% 69%
2002 130,300,000 46,800,000 36% 64%
2003 130,100,000 52,900,000 41% 59%
2004 130,600,000 61,400,000 47% 53%
2005 132,300,000 68,500,000 52% 48%
2006 134,400,000 73,200,000 55% 45%
2007 137,700,000 79,900,000 58% 42%
2008 145,600,000 87,100,000 60% 40%
2009 144,100,000 95,500,000 66% 34%
2010 142,200,000 98,700,000 69% 31%
2011 145,000,000 112,200,000 77% 23%
2012 148,400,000 119,600,000 81% 19%

IRS 2012 and Prior Year Filing Season Statistics
IRS Advancing E-file Study Phase 1 Report
IRS Advancing E-file Study Phase 2 Report


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TurboTax Deluxe Federal + E-File + State 2012 J.K. Lasser’s Your Income Tax 2013: For Preparing Your 2012 Tax Return H&R Block At Home 2012 Premium

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1040 image courtesy of Arvind Balarman /