Categories
Personal Finance

An introduction to electronic filing (taxes)

Electronic filing of taxes is one of the reforms that were brought about in the tax segment by internet. It is the easiest and quickest ways to file one’s tax returns.

Internet has changed the way people used to communicate earlier. Distances have been shrunk so much by internet that every bit of information from across the globe is now at one’s finger tips, at the few clicks of the mouse. This high speed data transfer through the internet has been made use in almost every field of activity today. And tax and finance sector is no different from other domains.

Electronic filing of taxes is one among those implementations that had helped the filing of tax returns a customer friendly exercise. Long gone are those days of exhaustive queues and struggle with paper and pen. To understand the advantages of electronic filing of taxes, let us have a round up of its advantages as opposed to the conventional way of filing returns.

  • First thing is that electronic filing of taxes avoids the need to gather forms and go through the exhaustive steps of filling in the details before rushing to the post office to get the thing posted.
  • Any mistake that has invariably occurred is corrected immediately, thus eliminating the delay of refunds.
  • Electronic filing of taxes completely eliminates the physical movement involved if otherwise filed in the conventional way. What one need is a computer with an internet connection. Now one can easily file the tax returns through one of the many approved online providers.
  • Through electronic filing of taxes, one could receive the refunds within half the usual time otherwise would have taken with conventional methods.
  • Electronic filing of taxes facilitates payment through credit card as well.
  • One can take a printout of the filed return directly at the moment of filing so as to have it in the records.

The electronic filing of taxes has reduced the time delay that was inevitable earlier by the factor of days. Even if one have waited till the due date to file the returns, electronically filed returns are processed overnight while paper returns take no less than 10 days to pass through the exercise. If the customer opts to have the refund directly credit to his/her account, the refund occurs within a couple of weeks.

For performing the electronic filing of taxes, the customer first should get his tax returns prepared (by oneself or through a tax professional) and then approach an IRS e-file provider for filing the tax (can be done completely online as well). Most tax professionals are authorized IRS e-file providers. Sign all the relevant documents and get a copy of your records. The e-file provider then files the returns electronically.

Within two days of filing the returns, the IRS will send the customer/ an IRS e-file provider an acknowledgement of acceptance or rejection, as the condition of the filed return it may be. If it is a rejection, mostly it will be a problem associated with the Social Security Number, which can be cleared without much a delay.

Electronic filing of taxes does not have a set fee as of now. Some tax preparers offer it as a free service along with the tax preparation while some others charge an additional fee on it. The only rule that governs the charging process is the one that mandates tax prepares not to decide the fee based on refund, income, or any other tax return figure. Hence do shop around and grab the best deal possible.