The Benefits Of Electronically Filing Taxes On The Internet
It is a little known fact that the IRS is under a mandate from the Congress to achieve 80% electronic filing by the year 2012. The IRS Restructuring and Reform Act (RRA) was passed in 1998. In the nine years since the enactment of RRA 98, the percentage of individual e-filed returns nearly tripled, from 20 percent in 1998 to about 58 percent in 2007. There has also been steady growth in the number of self-prepared individual returns filed electronically. As the Electronic Tax Administration Advisory Committee (ETAAC) noted in its 2007 e-file report to Congress, this progress is very gratifying as it indicates that e-file is catching on with those who had previously resisted it. As per IRS data, nearly 80 million returns were filed electronically in 2007, out of which about 22.5 million were filed from home computers.
There are major benefits to filing taxes electronically. The IRS tax code is enormously complicated, and it requires considerable patience and skill to navigate the tax code in order to figure out the best possible tax situation for an individual. If one attempted to sit down with the many forms pertaining to one's tax situation and proceed to accurately fill them out, it could be many days' work, and even then possibly with unintended errors. This is why trained tax professionals and accountants are in such great demand during the tax season. But for an individual filer, the possibility of e-file is a heaven send. There are many quality internet tax sites managed by tax professionals that make the process of preparing an individual return straightforward and error free. All one needs is an internet connection.
The most important advantage of e-file is that the individual does not have to understand the intricacies of tax code. The rules also change from year to year, and this adds a layer of complexity to an already complex enterprise. The way most internet tax sites work is that one creates a user account with the site with a personal login and a password. The user is then asked a series of simple questions such as age, birthday, marital status, number of children, the kinds of income that the user plans to report, information from W2 forms etc. Thus, for example, the W2 form is replicated on the screen with the possibility of inputting the information exactly as it appears on the W2. Once the user has input all the information asked for by the site, the program calculates the best possible tax situation. All of the relevant information is then input into the appropriate forms and the return is electronically filed with the IRS. Once the return is filed with the IRS, an acknowledgment is usually received from the IRS within a couple of days. If there are no unintended errors, the return is accepted by the IRS.
Having a program calculate tax liability and the subsequent electronic filing drastically reduces errors, the bane of tax filing. Once the user inputs all the information asked for by the program in a careful manner, the program does an error check before sending the return to the IRS. Thus, if there are any errors, the user can come to know of them immediately. If the program detects any errors, the user can immediately correct them rather than in the non-electronic paper return case where the IRS takes many days to get back to the individual in case of an error. A simple thing such as writing a zip code wrongly can be cause for delay while filing a paper return, but when electronically filing, the program cross checks for accuracy of such information.
Another important aspect of electronic filing is that refunds are processed faster and the individual has cash in hand much faster than it would take in the paper case. If one has a bank account, then this information can be input into the program, and then the IRS can deposit the refund into the account speedily.
Online internet filing is advantageous to buying and installing commercial software because one does not have to pay for the software up front. Also, installing software can sometimes be a complicated process and if one is not too computer savvy this can be more of a headache than a boon. Going online just requires an internet connection. All other aspects are taken care of by the user friendly nature of the online program that is designed to address typical concerns that many people might encounter.
Many people have legitimate concerns about the safety aspects of online tax filing. After all, the information entered into these online sites is very sensitive, and many people are justifiably concerned about the information falling into wrong hands. To be safe, inputting information on a trustworthy internet site must be the top priority. All trustworthy sites are built with safety and privacy issues at the forefront, and the sites use many third party hacker-safe protocols to ensure that the information does not fall into the wrong hands during the electronic transmission process. The trustworthy sites use the same safeguards as do banks and other financial companies that routinely undertake a heavy volume of internet transactions. When looking for a trustworthy site, the user must make sure that the site has been verified for privacy and security by reputable and independent third parties (e.g. TRUSTe and/or BBB for privacy, Verisign and/or McAfee for security).
http://www.RapidTax.com is a trustworthy site and has established itself as one of the premier online internet tax sites. While the basic aspect of what most internet tax sites do are the same, sites differ on the degree of user-friendliness of the programs. At RapidTax.com, they have prided themselves on putting the needs of the customer first, and this has led them to create a program whose ease of use is the most common praise they get from satisfied customers. Their program is free to try, and lets the customer know the amount of tax liability (either refund or amount owed) before the customer has to decide whether to file with them or not. http://www.RapidTax.com is TRUSTe certified, and McAfee secure (tested every day). They also use the Verisign SSL protocol, the industry leader in certifying the safety of internet transactions. They have established themselves as offering a one-stop shop for the tax needs of most individuals.
