Positives and Negatives of Filing Online Tax Returns

It seems everyone is talking of filing taxes online these and Why Not? Online option of filing taxes provides ease and convenience to hundreds and thousands of tax payers. As the popularity of online tax return options grows, so does the need to learn how to file these taxes online. Many people are aware that there is an option available to them through which they can file their tax returns online but they are still not aware how to do it. Still every year the number of online tax return submissions is growing rapidly both at Federal and State levels.

Before people decide whether to file their tax returns online they want to be made aware of positives and negatives of the process. Surely, this way is much more convenient but nothing becomes without its short comings. We should learn and be aware of exactly what things should be avoided while making use of the online option so that we void any mistakes.

Let us begin on a positive note and highlight pros of filing your tax online electronically:

a. While filing online the returns are submitted almost instantly and reaching IRS authorities. One can easily avoid hassle of preparing lot of paperwork and then using postal service to deliver your packet to the concerned authorities on time. The flow of information is faster and with much more easier compared to the traditional method.

b. The Tax refunds are received at much faster pace. Sometimes within 8 days of filing your return you can receive your tax refunds.

c. This method is much cheaper than the manual method.

d. The online filing system also has inbuilt check and correction methods which would mathematically check your submissions and make you aware of mistakes if there are any.

Listed below are some of the negatives of online filing of tax returns:

a. There may be a fee attached to preparation and filing of returns online. There are many software programs available for free which will help you with your Federal Tax returns but while filing your State returns online you will have to buy some of the software solution. The cost of such software would be in the range of $ 35 to $ 40.

b. Secondly, not all the people are proficient in handling and navigating computer software. For those who are not that computer savvy it becomes difficult to handle various files and folders and may need assistance or training in doing so. They may also make some silly mistakes due to their ignorance to handle the system.

Source by Amol Gupta

Tools to Estimate Your Income Tax Refunds

For many taxpayers the only good things about income tax regime is compulsory savings on account of refunds. Every year tax is withheld by your employer and deposited with IRS on your behalf, details of which are provided in your form W-2. At the year end when you file your tax return you can claim the refund on account of any excess tax deposited with authorities. As many of us have already planned what they would do with this money well before they would get it they become kind of anxious to know how much will they get as their tax refunds. Further let us discuss means through which one can estimate his/her income tax refunds for the year.

Before you file your year end tax returns it becomes important for you have an estimation of how much refund is due from tax authorities so that you can plan your tax saving expenses accordingly. Fortunately technology has come to our rescue here as well and offers online estimators and software which can help you estimate refunds.

The authentic figure of your tax return can only be known when you file your tax return but as many of us are an impatient lot, we can get an estimate of this figure using the new technological tools and use this information to best of our advantage. Many internet based websites are providing tax refund estimator tools which can provide us estimate of our yearend tax. While using this tool you need to provide some basic information related to your income and status in the system and estimate of tax refund is prepared based on it. The information which one must keep handy while working with the estimator tool is related to income amounts, age, marital status, home related expenses, donations, retirement and contributions, withholdings, etc.

There are number of website which provides such tools. You can just search in Google to look for websites offering tax refund estimator tool. It is also advisable to check for the estimates using 3-4 different websites. As all the websites used different software to estimate this amount you can average out the results obtained from different websites to arrive at a figure which is bound to be closer to actual refund value. One you have an estimate of this figure with you, you can plan how you would like to spend this amount. Also this will act as a good exercise into build-up of the actual tax season.

Source by Amol Gupta

Tax Accounting

Accounting is the recording, interpretation and reporting of financial transactions. Each and every business must keep proper record of all such transactions. There are several branches of accounting such as financial accounting, managerial accounting and tax accounting.

Whether your business is a sole proprietorship, partnership or corporation, business men must file an income tax return and pay income taxes. Proper recording and accurate tax return will be beneficial in maintaining proper reputation of business and on the other side, poor records may result in underpaying or overpaying of taxes. It means recordkeeping will directly affect the tax return policy.

In simple we can say that Tax Accounting is important for complying with tax laws as well as for minimizing tax expenditures.

Most taxpayers dread tax season all year round and for those who understand the process, filling taxes seems a tedious task. But for others it becomes a confusing ordeal. A tax accountant plays a vital role in the formation of a business. Tax accountants are responsible for maintaining proper record. They tend to offer a broad range of services, from budget analysis and asset management to investment planning, legal consulting, cost evaluation, auditing services and many more.

Tax accounting will cover financial planning services, litigation consulting services and managerial advisory services. The tax accounting group provides a wide range of tax compliance, planning and consulting services to individuals, business firms (including partnership and corporations).

There are several income tax software programs available on the market for completion of yearly taxes. TaxACT software is available in online, download and CD-Rom form. TurboTax software offers an online or a software package for personal or small business tax preparation. The software can be downloaded or provide by CD-Rom. TaxSlayer software can be used online or downloaded. There is no charge for the web version however there is a small efile fee for federal taxes. TaxCut income tax software is developed by H & R Block, is ideal for simple returns.

Source by Sardool Sikandar

Free Tax Filing Online – Beat the Tax Season

Tax season will be here before you know it, but one thing you may not know is that because of an alliance between tax filing software companies and the IRS, free tax filing online is available. This is generally open for the new tax year from the 15th January, so you can file your taxes ahead of time and not have to deal with the stress and rush of waiting till the very last minute.

It is hard for some people to believe that tax filing can be done for free in a simple and straightforward manner, and they are still paying someone else to write up their taxes for them. While there is nothing wrong with seeking guidance or professional help, we all like to save a buck, don't we? But the only sure things in life are death and taxes, and they have to be paid, even after death. So free tax filing online will save us a service charge, and this tax planning is readily available.

It is very simple to find a company online which offers this service, there are many which are completely reliable and they are of immense assistance to diligent tax payers. The records speak for themselves and now thousand of people are using these services.

No-one should never be apprehensive if using free e-filing tools online, but if you have concerns use sites which are recommended by the IRS. Links to these sites can be found at the Internal Revenue Service site and if they recommend them, you can be sure they are completely above board, also if they say free, then free it is. So beat the April 15th rush, get your taxes filed as soon as possible and don't have the stress for thinking on the 10th April, that your taxes have not been filed.

Source by Todd Walters

State Tax Free Online Filing – A Cooperative Effort

It is a cooperative effort between the IRS and state tax administration agencies to provide state tax free inline filing. This system is available for both state and federal tax returns and it is basically known as e-filing. This can be accessed through your home computer, and you can pretty much guarantee if you pay a tax professional he or she is using these free services.

Each state has their own tax requirements and at present there are 38 US states which allow their residents state tax free online filing. It is a simple process to find out what these states are by simply accessing the IRS main site and clicking on the appropriate link.

There are also certain income requirements which allow diligent tax payers to make use of e-filing, but 70% of the population of the US fits these profiles. Both federal and state taxes may be filed simultaneously, and what a big relief it is to get that all done and out of the way before the deadline.

Electronic filing places both state and federal tax returns in a separate packet, and they are submitted to the IRS, in a "Taxpayer Envelope". They confirm receipt of the envelope within 48 hours, and they also act as a "Post Office" for the particular state in which the taxpayer is resident.

This option is of huge benefit to the taxpayer as it means the tax return is 100% correct because the software eliminated any errors. It is processed far more efficiently and the taxes don't have to be sent to separate agencies, which always makes us nervous. Refunds are also processed much faster and this is paid back by direct deposit into the savings or checking account of the taxpayer.

For the environmentalists amongst you, it saves paper, and if 70% of the population of the US e-files, think about the paper savings, think how many trees can be saved and this should motivate you to find out more about state tax free online filing.

Source by Todd Walters

Advantages of Filing Income Tax Returns Online

In order to fulfill your duty as a responsible citizen of the nation, one of the primary tasks you need to do is to pay for your income tax returns in a timely manner. Failing to do so can add to the taxable amount you need to pay, thereby putting a dent on your pockets, as well as degrade your image in the banking sector, which may lead to rejection of loans, etc. due to lowering of your credit score. This means that filing up for income tax returns should be a priority for every individual, and should be completed well within the given time period in order to avoid interest or penalty payment at a later stage.

In order to provide aid to your tax return filing related woes, technology has provided some great resources. With the advent of the internet era, it is now possible to do e-filing of your income tax returns. This comes as a great boon for most tax payers, as they can simply file for the returns from the comforts of home, after a hard day’s work. And the best part is that it’s totally free of cost. Income tax filing websites provide a simple platform for you to fill in your details and file for income tax.

In addition to saving your time and money, there are a number of other advantages of filing your returns online. Some of these have been shown in the list below:

  • Intuitive application procedure: This is a highly intuitive online application procedure, which is customized according to the tax payer’s income tax situation.

  • Income Tax Calculator Tools: If you want to make an estimate of the refund you’ll be receiving, it is a good idea to make use of income tax calculator tools available online. You have to enter your basic details such as Name, Age, Residential Status, etc. After this, you need to make use of your pay slip to give the details of the income you have earned. Please note that you only need to enter your taxable income for the particular year, which is calculated after deducting the various savings and other non-taxable investments you may have invested in. In case if you did not apply these already, the income tax calculator will give you an option to add any tax deductibles at a later stage. You can apply these and calculate your tax refund accordingly.

  • Free Software Programs: There are various free online programs that are available over the internet to allow you to calculate your tax deductibles for free. New users need to sign up for creating a new account. These free filing programs are much more in-depth than the income tax calculator and these will calculate your return automatically.

  • Secure Gateway: The payment gateway is secured by Verisign, and you could be certain that your details are in safe hands.

  • Auto-Read forms: The Form 16 could automatically be read by the website, this helps you save on a lot of time as there’s no need to enter every small detail.

So start filing your tax returns online today!

Source by Nitin Sharman

Guidelines for Income Tax E-Filing

E-filing of income tax returns forms is very simple and easy. To begin with, you need a permanent account number or PAN number with which you can register on the e-filing portal to file your return.


The portal can be accessed by visiting the Income Tax Department website. You can register on this portal if you are an individual, a trust, a firm, a company or a Hindu undivided family.

If you are a new user, you can choose the Register Yourself option. For this you need to have a valid PAN number, and in case you do not have it, you can apply for one on the portal itself.

PAN Card and Registration

PAN card holders can select the relevant user type and proceed with the registration process. While filling the necessary details, ensure that you check the basic details, enter the relevant mobile number and email address, and validate the details. After this, a registration screen will pop-up.

Type in the correct password and save it with yourself. Type in the personal details along with your address information and submit your form. The system will authenticate your respective details.

Transaction ID

On successful submission, the transaction ID along with other details will be screened. Simultaneously, you will be sent an activation link on your e-mail ID. Check your inbox and click on the link in order to activate your e-filing account. Once you have done this, you can then log in to your account through the income tax filing portal.

There will be additional menu options displayed. The dashboard option is where you will receive your current notifications along with the details of your previous e-filing returns.

Account Information

Once you click on the My Account button, there are a number of services provided in the same such as List of CA, outstanding tax demand, etc. The E-file tab enables you to file your returns and the Downloads option is for downloading your forms. The Profile Settings option is for updating your profile such as change password, PAN details, Digital Signature Upload, etc. My Request option is to track requests apart from e-filing such as status on request for intimation. The Worklist option comprises of list of actions pending at your end.

The Helpdesk option is available for you in case you face any problems related to raising your ticket. You can also check the status for the same if you have raised a ticket.

How to E-file your Taxes?

After being a registered user on the portal, you are now eligible to file your income tax electronically. There are also two ways of filing your taxes through the electronic mode:

1. Download the ITR form and save it on your desktop and click on the generate XML option. Save it on your laptop or computer. Open the e-filing portal and click on the upload XML button. Login through your account and upload the file saved by you. This will be followed by a confirmation message. This helps you to fill the form without any time limitations.

2. The other option is to use the Online ITR form. With the Quick e-file ITR-1 button, all you have to do is log on to the portal. Select the type of ITR form along with the assessment year. If you have a digital signature press Yes against the question and in case you do not have one, press No. Click on submit. The ITR form will then open asking you to fill in the details. You can also choose the Save as Draft option if you do not have all the information at once. Click on the Submit button. For those with a digital signature will receive an acknowledgment ID and those without it will receive an ITR-V which will be sent to the respective e-mail ID. Print it and send it to Income Tax Department – CPC, Post Box No. 1, Electronic City Post Office, Bengaluru – 560100, Karnataka. "Alternatively you can also now e-verify your ITR using an Electronic Verification Code (EVC) that can be generated in many different ways. EVC can either be generated through net banking, through ITD website, using Aadhar number, using Demat account details, using bank account details or via ATM. The detailed procedures of how to generate an EVC are given on the ITD website. Using an EVC you can verify your ITR within minutes and do not need to send the signed ITR-V to CPC Bengaluru.

Source by Nitin Sharman

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