Did You Know eFiling Protects Your Tax Returns?! Here’s How

Did You Know eFiling Protects Your Tax Returns?! Here’s How

by | Apr 19, 2022 | e-filing

The IRS began to accept tax returns on January 24 and has already sanctioned nearly 38 million refunds as of March. An average of almost $3401 has been refunded through March 4. 

If you are a resident of the US and are hustling with your tax returns, you have come to the right place. Although the process is challenging and some may find it complicated, eFiling for individuals is a more straightforward, faster, and safer means to file tax returns. 

Individuals can use eFiling for both federal and state taxes. The federal and state government has separate software that allows individuals to file their taxes electronically and send them to the government. 

Continue reading to learn more about eFiling, why should you consider it over in-person filing, its benefits and how we, at AOTAX can help you. 

Reasons to Use eFiling for Tax Returns this Season

Taxes can be filed in many ways: some fill out Form 1040 or Form 1040-SR by hand and mail it. However, many find it convenient to hire a tax preparer to file the returns, which may be expensive. 

The most straightforward way to file taxes is through eFiling using filing software. Here are some perks of eFiling for individuals:

Ease of use and flexibility

When filing taxes manually, one has to fill them out in person and mail it to the government or walk into the tax return office during 9-5 working hours to get it done. 

With eFiling, individuals can file tax returns at home at any time. This is more convenient and flexible for many who do not have the liberty to take time off to go to the office or send the forms over mail. 

Saving time and money

Efiling tax returns directly send your data to the server systems of the IRS immediately. This eliminates the need for sending mail to the IRS, which can take days. 

This also eliminates any transmission errors or unprecedented delays, or lags. As a result, eFiling is easier for both taxpayers and tax agencies as it is easier and faster.

Accurate filling

Efiling eliminates errors with record matching, transmission errors, or other manual errors from mailing tax return forms or filing them in person. 

This is essential to get maximum returns of taxes. 

With eFiling, individuals can upload all the necessary documents and the data and run mathematical accuracy tests to assess if figures are aligned. 

Using eFiling software can especially come in handy. The software can help assess typos, check mix-ups, and ensure that the IRS accepts the predicted refund amount and is processed on time. 

Reduced data manipulation

Many risks of filing tax returns manually come with data manipulation and window dressing. With eFiling, it becomes impossible to manipulate data. In addition, linking or tracing back the taxpayer also becomes more accessible with eFiling. 

One of the reasons e-filing is more safe, according to the IRS, is that your information is never in a hard copy version unless you print it off. Because there is no physical copy, there is less possibility that someone will look at your information when you are not present.

According to Mark Steber, the chief tax information officer at Jackson Hewitt, this also eliminates the risks of tax refund theft and identity theft caused by manual filing.

Authentic and accountable

Efiling has made taxpayers and tax agencies more accountable and authentic. However, the paper filing comes with high ambiguity, leaving taxpayers and tax agencies to treat tax returns with lethargy and negligence.

Efiling comes with frequent and periodic notifications that allow people to know if their tax returns are approved or denied, giving more certainty to the process. 

This helps individuals do what is necessary in case of a denied request.  

Quicker refunds

Quicker-Refunds

A tax expert and certified public accountant said that 9 out 0f 10 tax returns were issued by the IRS within 21 days when filed electronically. In addition, Mark Steber said that eFiling is the fastest and safest way for taxpayers to have their refund directly deposited into their bank account.  

With eFiling, most refunds are issued within 21 days either directly to the bank account mentioned in the forms or as a paper check which can take longer. 

However, filing tax returns in person can take weeks or even months to reflect in your bank account and can take up to two months to receive a paper check.

Tax experts recommend using eFiling for individuals to file taxes and consider filing them earlier to get faster returns. 

Efiling for Individuals with AOTAX 

AOTAX has helped many Indians in the USA file their tax returns using eFiling. AOTAX helps its users by filing individual taxes and getting tax drafts within 24 hours of filing. We also help Indian professionals working in the US with eFiling services with high accuracy and success rate. 

If this is the first time you’re filing tax returns or if you find it complicated to file them, we can help you create a tax draft, making it more straightforward, fast, and cost-effective to file your taxes. Reach out to us to easily file your taxes electronically with AOTAX.

Top #5 things to do if you have missed the tax deadline

Top #5 things to do if you have missed the tax deadline

by | Aug 20, 2020 | e-filing, IRS, tax deadline, US Treasury Department

Top #5 things to do if you have missed the tax deadline

With response to the outbreak of the pandemic COVID-19, the US Treasury Department and the IRS had provided special tax filing and payment relief to the Americans. The deadline for tax returns had been extended by the IRS from 15th April 2020 to 15thJuly 2020. The IRS had continuously urged the Americans to file their tax returns before the completion of the tax deadline or request for an extension in case of ineligibility to file or pay by the declared deadline.

However, the federal tax deadline has come and gone now. If you have missed your federal tax deadline and have not also filed for an extension then, you should have an idea about the course of action you can follow now.

Go ahead and file as soon as you can

  1. If you owe money to be paid to the IRS, then you must file your tax returns soon to avoid paying any penalties to the IRS.
  2. Even though the IRS would charge penalties on you for the late filing of your returns but that would be somewhat less than the penalties charged for not filing the tax returns at all.
  3. The IRS would have received Form 1099-Misc and Form W-2 which would reflect your income earned for the year. You must file your returns immediately so that the IRS does not show that you need to pay more taxes.
  4. Moreover, you might be having a tax refund and it may not come if you have a tax penalty to pay. In case you have a tax refund and do not file your taxes then you would have to wait for three years of the tax return due date.

Make arrangements for the payment

If you are not filing your tax returns on time because you are not sure about how you will arrange for your payment amount then, you can follow the below-mentioned steps.

  1. You must file your tax returns soon, pay whatever amount you can arrange, and then request a payment plan from the IRS.
  2. There are several options available with the IRS such as a request for a short term payment plan, offer in compromise, long term installment plan, or temporarily delay collections in some cases.
  3. By the short term payment plan, you can pay the amount you owe to the IRS within 120 days. Similarly, by long term installment agreements, you can pay your amount over 6 years.
  4. In case your total taxes, penalties, and interest are up to $50,000, you can request for an installment agreement online.

Information about the penalties

If you have not filed your tax returns or not paid your taxes on time, you should be aware of the penalties which you would have to pay.

  • Failure-to-file penalty – This penalty would be 5% of the unpaid taxes for each month your tax return filing is late until 5 months. However, if you are filing your tax returns late by more than 60 days you; you would have to pay whichever is less i.e. 100% of the federal taxes you owe or a specific dollar amount which can be adjusted annually for inflation. This “specific dollar amount “is $435 for those returns which are due after 1st January 2020.
  • Failure-to-pay penalty – The IRS would charge you 0.5% of your unpaid taxes for each month of unpaid due up to 25%. Interest would be accrued on the unpaid taxes and would be equal to the Federal Short term rate plus 3%.

In most cases, the failure-to-file penalty is much more than the failure-to-pay penalty. So, it is advisable that if you are not able to pay the taxes on time you should at least file your tax returns on time.

Use e-filing

If you have not filed your tax returns yet, you can still do it online by using the e-filing method. If you are using the conventional methods of tax filing, it will take a longer time to be received by the IRS and to be processed by the IRS.  If the filing has been done by electronic means, the IRS would process the return requests within 21 days from the date of receipt of the return.

Do not ignore

You should be completely aware of your specific tax situation. The sooner your tax issues are addressed the better. If you continually keep on ignoring your taxes, you would have to face some serious penalties like

  1. IRS can file a notice of a federal tax lien.
  2. Your property might be seized.
  3. IRS could forfeit your refund.
  4. In serious cases, your passport might be revoked or charges could be filed against you for tax evasion.

Conclusion

It is advisable not to avoid your tax-related problem, do good research, seek help from professionals, and work toward finding a solution to your problem.

References

  1. https://www.cnbc.com/2019/04/17/what-to-do-if-you-missed-the-tax-deadline.html
  2. https://www.irs.gov/newsroom/what-someone-should-do-if-they-missed-the-july-15-deadline-to-file-and-pay
  3. https://www.cnbc.com/2020/07/15/today-is-the-tax-deadline-heres-what-happens-if-you-dont-file.html