Taxes Are Going Digital

taxesTax day is near and in this world of technology, more and more people are going digital when filing their taxes. April 15 was the day to avoid the Post Office at all costs, now however, taxpayers can sit in the comfort of their own home and send in their returns via the World Wide Web. 85 percent of tax returns are expected to be filed electronically this year, quite a contrast to years gone by prior to the internet, when literally hundreds of people would show up to the Post Office on the 15th of April. Gone are the days of super late nights for postal employees, when the office was open past midnight in order to accommodate all the last-minute filers.

According to the Internal Revenue Service (IRS), the cost is cheaper for them to process the electronic versus paper versions of tax returns. They state that in 2011, it cost $3.45 more to process a single paper return than a single electronic return. That is a significant savings for the IRS. They also state that errors on the electronic returns are down to one percent as opposed to nearly 20 percent for those that file by paper. That is a lot of potential money not being claimed, depending on what the error is. There are even other ways to make payments to the IRS these days, and sending in a check is only one of many options. Other ways to pay include electronic payments. By all accounts, it appears that going digital with taxes is beneficial to the IRS and the person or persons filing.

Changes brought on by the internet age has made the transition from paper to electronic safe, secure and much faster than it was even 10 years ago. Things that haven’t changed, would be the deadline to either file, or request an extension, which is fast approaching. Here are some of the things to remember if filing taxes is on the agenda in the next few days. Make sure to bring all paperwork, like W-2’s or 1099 forms. Bank Statements, stock statements and really anything that may find its way to the mailbox that says ‘Important tax information’ on the envelope, means it should find its way to the tax specialist.  To claim deductions, records must be provided for that also. Many people confuse the extension to mean that they can get an extension to pay as well as file, and this is just not true. If taxes are owed they must be paid, or an estimate of payment must be sent before or with your extension. The deadline is April 15 for filing, period.

With the deadline looming, even if a person did not make a lot of money in 2013 it is a good idea to file a tax return and in most cases, it is required. Money is being left on the table if a tax payer does not file, as the IRS notes on its website. There are many available tax credits out there and taking advantage of them is as easy as knowing they are there, like the Child Tax Credit, and the Earned Income Credit and many more. There are credits for parents and students and heads of households, so jump on-line and file the taxes digitally, or head to the nearest tax preparer, and beat the deadline.

By Kristi Cereska

USA today
Aiken Standard
Motley Fool

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