Tuesday, November 19, 2013

Taxes - Internet makes it a little easier

Beginning in 1986, a pilot program was established in 3 cities with 5 preparers that allowed for simple returns expecting refunds.  That first year, 25,000 people electronically filed for tax returns.  Currently, several methods exist including using software to prepare the returns and send them to a intermediary who then forwards them to the IRS or having a authorized preparer compete the taxes and transmit them.  The IRS program is called Federal/State E-File and allows taxpayers to submit their state and federal returns at the same time to the IRS.  In 2001, 40 million federal income tax returns were completed online.

Filing online is known to cause faster refunds, be more accurate as it allows for double checking, and can confirm that the return was submitted successfully.  The increase of online tax filing is similar to the growth in the accessibility and use of the Internet  In 2010, E-Filing receipts totaled over 98 million.  79% of all taxes filed were completed online in 2011.  This is a huge increase from the 30% in 2001. 

The ability to file taxes online also allows for a tremendous amount of paper and time saving.  E-Filing has saved billions of sheets of paper over its lifetime.

Below is a chart showing the returns filed electronically by state for 2010.



http://www.irs.gov/uac/IRS-E-File:-A-History
http://www.learnvest.com/knowledge-center/how-many-trees-are-saved-each-year-by-e-filing-taxes/
http://ecommerce.hostip.info/pages/392/Electronic-Income-Tax-Filing.html
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5 comments:

  1. UnknownNovember 20, 2013 at 8:15 AM

    I think that the ease of filing online has a lot to do with the growth of electronic filing, but I also think that the low cost of tax preparation software has had an impact as well. Before I started using TurboTax, I went to H&R Block to have my taxes filed. After paying H&R Block their huge fee, I really didn't feel the need to pay them even more to file electronically. Now that I can do my own taxes at home with a $50 TurboTax purchase cost the additional cost of e-filing is not that big of a factor anymore.

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  2. Paige KnudsonNovember 20, 2013 at 1:25 PM

    I think it is awesome that there are reliable e-filing services. Many people are able to see more of a tax return with out shelling out more cash for someone to file them.

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  3. UnknownNovember 20, 2013 at 3:39 PM

    E-filing is both fast and convenient. It makes the tedious tax filing process much quicker and easier.

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  4. AnonymousNovember 20, 2013 at 6:03 PM

    I love the ability to complete and electronically submit my taxes. This is truly a useful innovation. I never completed my own taxes in paper form. It just seemed intimidating and cumbersome. However, Turbo Tax, for example, basically holds your hand through the entire process. Some other great benefits of this are increased accuracy, speedy returns and a more eco-friendly process.

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  5. Thomas SternNovember 21, 2013 at 10:48 AM

    I think that filing you're taxes online is a great idea. Many people are extremely busy and do not have the time to take their taxes to a CPA. Offering these services online has become very convenient. Also, most of these services are much cheaper than paying someone else to do you're taxes.

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