Online income tax filing is becoming increasingly popular in the USA as more people are seeing the benefits over mailed returns. After all, let’s face it: how could a mailed income tax return be more secure than online income tax filing encrypted to the highest standards known to the IRS? Initially trialed in Phoenix, Raleigh-Durham and Cincinnati in 1986, online tax filing was floated across the nation in 1990 and has been adopted by an increasing number of people since then. It is now the most popular method of tax filing and offers many benefits other than the reduced use of paper.
Which method of filing your taxes would you prefer? What are the benefits of online income tax filing that everybody is talking about? Well, for starters, if you prefer to receive your refunds in the forms of direct bank deposits, then with online filing, you have them in as little as ten days! Yes, that’s right: ten days. Not ten weeks, but ten days. But not only that, you get an acknowledgement within two days, so you have proof that you sent it in and it was received. Nobody can claim they never got it! Online filing is by far the fastest way of doing it and definitely the most secure.
If you think that snail mail, with a mailman carrying your mail around in a mailbag, and then sending it through a mailbox for anybody to pick up and look at, is more secure than the top encryption systems know to the US government, then you are welcome to use it. The rest of us will go with the flow and get our tax returns securely sent and acknowledged right on time, rather than a few days late.
Most people agree with us, because almost 65% of returns are now filed online, with over 80 million going that way before 2008 began. Why is this then? Why the popularity of online income tax filing? One factor is the dread of your tax return getting in late, or being lost in the mail and not getting in at all. Stuff does get lost in the mail, but who would believe you? We have already discussed security, and it is just as secure as your details when you make an online purchase. You have to give exactly the same information online.
The IRS online system for income tax payments is called e-File, and it is significantly more accurate than other methods, with only 1% errors in comparison with the 20% of offline methods. 20%! What a disgrace, and it all can’t be put down to snail mail. Probably the online form is easier for people to fill in because the help is better. Whatever the reason, people that send the return in online have 20 times more chance of getting it right than those that post them. Your return is checked for accuracy as well as completeness before it is e-filed.
Apart from the saving in paper, and hence in trees, the online method is significantly more convenient, and less chance to go missing, and as previously said, online deliveries tend to go missing a lot less than those that travel through normal mailing systems. Everybody wants their tax returns sent in on time, and you have more chance of that happening with an online file submission than with a postage stamp and mailbox.
Cost is something that worries some people, but you needn’t worry because if you earn less than $54,000 annually you don’t pay to file your Federal return. The IRS got together with the Free File Alliance LLC to come up with a free electronic tax filing system for taxpayers, and they achieved that with a system that is available free to anybody that earns the sum mentioned above. There is no compromise in security when compared with the normal online service, and helpful to those that find it difficult to meet the costs of the regular service. It is named Free File.
Free File is a useful agreement, because it offers the low income individuals the opportunity to experience the benefits of the Free Service. You must go to the IRS website to join the service where you will find a list of companies that participate to help you with it.
Another benefit is if you already owe taxes, you can file right now and pay later. You can file the state and federal returns at the one time, and save yourself time, and can use any computer to do it with, including one belonging to your tax preparer.
Preparing to e-file your income tax return is a very important part of the process. since it involves more than just sending the file: that is also when the return is checked for errors, and to be certain that every schedule is complete. Error checking can be carried out easier then than throughout the whole offline mailing process. For that reason the errors in online income tax filing are only 1% compared to the 20% of the normal mailing method.
A lot of that has to do with the ease with which the online form can be filled in compared to the difficulty of completed a complex paper form. However, that aside, online income tax filing is now favored over offline tax filing, because it is easier, quicker and more secure in the eyes of those involved.
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Contributor's Note
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