In various nations across the world, revenue authorities require income earners to pay their taxes. In the US, the process of filing taxes can be done manually: on paper, or it can be done electronically. In comparison to manual tax filing, online filing is a much more reliable, and much faster process for both the taxpayer and the revenue authorities. However, there are advantages and disadvantages you should know about.
Filing your tax return with the IRS online is so much faster and saves you and the IRS a lot of time. Furthermore, it’s much more convenient as you can do the filing from home, and can stop and start the process at any time. There is a save option that will bring you back to exactly where you left off if you need to go and do something while in the process of filing. This increases the efficiency of tax institutions who are able to process large volumes of tax filings and serve a huge number of clients with more accuracy and less time.
There are major benefits in terms of accuracy as minor calculation errors can be avoided that are pretty common in paper filing due to taxpayers not being entirely certain about numbers. Online tax filing is immune from tax officials or taxpayers fraudulently manipulating the numbers. As all the calculations are done by the computer, errors are significantly reduced.
The process of online filing is highly efficient as your data and information, regarding tax, can be easily and instantaneously accessed from anywhere and at any time, year after year, as long as you have computer access. Furthermore, the online system is highly interactive and user-friendly and provides immediate feedback to clients to help them in making informed decisions critical to their financial health.
Online filing is safe and secure. There is no intermediary in between you and the system who can deliberately manipulate the information that you provide. It is also not prone to human errors like entering incorrect information or mishandling of the documents causing them to get lost. Since the data is stored electronically on computers there is less chance of losing it to calamities such as a fire that can completely destroy the documents. As computer systems are more robust in terms of security, it’s almost impossible to gain access to the documents without the right login details.
Above all, online tax filing is extremely cost effective as there are no extra charges involved like paying postage and shipping fees while documents are being transported between different locations. There is also a massive reduction in labor costs as almost everything is done online.
Online tax filing is only applicable to those who have access to a computer or possess at least a small amount of knowledge on computers.
Facilitating online tax filing can require massive investments due to operational costs in managing the entire electronic tax filing system that needs to be regularly updated and the training of personnel on how to use such systems.
It can have adverse effects on the economy as people become jobless due to computers doing most of the job.
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