Tax season is officially upon us, with the IRS having begun accepting and processing Americans’ 2021 tax returns as of January 24, and the 2022 tax-filing deadline set for Monday, April 18. And in the digital age, the most popular way to file returns — by far — has become submitting them online, also known as “e-filing.” In fact, according to IRS statistics, more than 90% of American taxpayers have been filing their tax returns online since tax year 2019.
The practice’s popularity should come as no big surprise — for many, e-filing is considerably more convenient than using pencil, paper and the postal service. It can also provide a range of other advantages. If you’ve never filed your taxes online before, consider these seven benefits that e-filing can deliver:
- Convenience — Perhaps the top reason for e-filing’s popularity is the convenience it offers. The tax returns of the past required most taxpayers to visit an accountant’s office with a stack of their financial forms and answer questions while the tax preparer clicked away on a calculator. Alternatively, today’s commercial tax-preparation software walks taxpayers through the process using a simple question-and-answer format, and taxpayers can submit their returns from anywhere using an internet-connected computer. Taxpayers can still choose to put their returns together with the help of a professional tax preparer, most of whom will also file the returns electronically using tax-preparation software.
- Simplicity — Most of the commercial tax-preparation software available today is extremely intuitive and user-friendly, asking taxpayers simple questions about their life circumstances and finances to determine which tax deductions and credits they’re eligible to claim. To make things even easier, if a taxpayer uses the same software year after year, it can even transfer large amounts of pertinent information over from his or her previous years’ filings. Users of the software don’t need to know anything about the tax code to successfully prepare their taxes, as the simple, step-by-step process covers it all while walking them through the entire preparation and filing procedure.
- Money savings — While taxpayers can still hire professional tax preparers to assemble and submit their tax forms, most of them simply don’t have to — especially if they’re one of the 60 million U.S. taxpayers who file basic (and easy-to-prepare) tax returns. Particularly since today’s tax-preparation software is so simple and straightforward to use, it presents a clear DIY opportunity that taxpayers can take advantage of to save themselves the up to $100 that basic return preparation from a tax professional can cost.
- Security — Stringent security measures have been put in place for online tax filing, including the use of modern encryption technology that protects taxpayers’ information from cybercriminals. Further, the IRS works closely with the U.S. states and leaders in the tax industry to protect taxpayers from identity theft and refund fraud. As a result, e-filing is a safe and highly secure option for submitting tax returns.
- Increased accuracy — Filing an accurate tax return is critical, as providing incomplete or incorrect information to the IRS can result in significant fines and other penalties. And by automating the tax-preparation process and providing digital double-checks against common filing errors, today’s tax-preparation software can help eliminate human errors from taxpayers’ returns. Further, when a tax return is e-filed, the IRS can nearly instantly alert the taxpayer to any errors such as incorrect Social Security numbers submitted for the taxpayer, his or her spouse and/or his or her dependents.
- Multiple payment options — For taxpayers who owe money to the IRS, e-filing allows them to submit their return early and set up an automatic payment that can happen at any time before or on the April 18 tax-payment deadline. These taxpayers can also easily set up a fast and easy electronic payment from their bank account using IRS Direct Pay, or utilize a range of other payment options to ensure that their debt is paid on time.
- Faster refunds — In addition to receiving fast confirmation — often within minutes — that their return has been received and accepted or denied by the IRS, e-filing also gives filers who are owed tax refunds quicker access to their money. This is the case, of course, because e-filing gets the return to the IRS much more quickly than mailing paper forms does. And once the IRS has received the return, the option for direct deposit allows taxpayers to skip the wait for a paper check to be cut and sent by mail. Further, because the IRS is dealing with understaffing and other pandemic-related challenges in processing taxpayers’ returns this year, it is urging taxpayers to file their returns online to avoid unnecessary delays.
Proudly serving South Carolina since 1933, Arthur State Bank offers accounts and services to meet a variety of financial needs. To help you achieve all your financial goals, the bank offers in-person service as well as a range of convenient digital solutions. To learn how Arthur State Bank can help you with banking needs ranging from checking and savings to retirement accounts, mortgages, other personal loans and more, visit arthurstatebank.com.