The coronavirus has attacked us from every direction. People are forced to stay indoors, maintain a distance from others, make certain adjustments in their lifestyle, and live with the basics.
The pandemic has also brought with itself the most difficult times for the authorities and healthcare workers. They are working day and night for the betterment of the civilians without caring for their own lives.
How does the coronavirus impact the current tax season?
Keeping the current situation in mind and for everyone’s safety, the Internal Revenue Service (IRS) has decided to put a brake on processing paper tax returns and urged people to file their returns electronically. The body has closed all its processing centers until further notice as all the employees are working remotely.
Thus, electronic filing of tax returns has become the need of the hour.
Should You File Your Taxes Electronically?
Electronic filing (e-filing) helps the tax preparers as it reduces the chances of manual errors that occur while entering the data into the system. The taxpayers can directly file their returns on the official website of the IRS using a tax preparation software.
- Since the document processing centers are closed, e-filing is the only method to file returns.
- The tax return reaches the IRS quickly and is confirmed or rejected within 24 hours.
- In case the return is rejected, the reasons will be mentioned about the same.
- As it reaches the IRS faster, the tax refunds are also processed quickly.
- You also save yourself from the hassle of printing and posting your return manually.
Let’s see how paperless accounting and tax filing will benefit you:
1. Ease of Use
For most people, tax filing has always been a complicated process that involves collecting all the necessary information and forms, consulting a tax professional, entering data into the forms, doing complex calculations.
However, when you e-file your taxes, the whole process becomes straightforward. Thanks to technology, the software takes care of it all; you have to follow the steps. The process involves gathering all the relevant information and answering the questions in the software.
While e-filing, there’ll be no checkboxes to tick. Instead, the software will take you through the process step by step. You’ll have to enter the information and ensure that the entered data is correct.
With everyone working remotely and enormous data being shared over the internet, the risk of cyberattacks is on the rise. Thus it is natural to feel that it is unsafe to send sensitive information online.
Experts believe that though no method is 100 percent secure, e-filing is safer than paper filing.
What happens you file a paper return? You need to print all the documents, include a tax payment with them (if you have a tax liability), and post all of them. Just imagine the number of channels and hands your return will travel before it reaches the IRS.
And, the same number of hands will handle your refund check (in case of a refund) till it drops into your mailbox. A lot can go wrong in this process.
On the other hand, e-filing is instant. Your data will be encrypted, and all the possible security measures will be followed to ensure its security. Your tax liability will be paid online, or you’ll get your tax refund directly in your bank account; such transactions are monitored carefully to ensure that there is no data breach.
3. Less Time Consumption
Filing your taxes is essential for the development of the country. It shows that you are a responsible citizen and have contributed to the growth of the country. But, it doesn’t mean that you have to waste an infinite number of hours to file your return. E-filing is the best way to save time. Accountants need to be at the top of their game this tax season.
All you need to do is collect all the information/documents in advance. This way, you’ll be able to complete the filing process in a single sitting.
4. Cost Saving
Traditional filing of taxes includes printing and making multiple copies of documents, hiring a tax preparer (if your tax-calculation is complex), traveling, posting, etc. Each step has a cost attached to it. When e-filing, the associated cost with these steps is eliminated, and you end up saving money.
Also, most of the processes mentioned above might involve interaction with many people (like visiting the post office), which will increase your chances of catching the coronavirus.
5. Eco Friendly
As e-filing is entirely paperless, you’ll save a lot of paper in the process. The overall paperwork involved in the process, like the postal process and IRS formalities, will considerably reduce your carbon footprint. Also, the usage of toners, inks, other such components that damage the environment is significantly reduced.
6. Better Accuracy
In the time of the coronavirus, everyone’s pockets are negatively impacted. People have realized the value of every penny. Thus, there needs to be no mistake in filing your taxes as a small mistake may result in the collection of more taxes than necessary.
For instance, if there’s a calculation mistake, the IRS could seek additional payment with fees, interest, and other charges.
While e-filing your taxes, the software ensures that all the calculations are accurate and free from errors, reducing your chances of filing an incorrect return.
Things have changed rapidly around the world. The coronavirus has taken everyone by storm, and we are adjusting our lifestyle in more than one way, including accounting and filing taxes. Paperless accounting is what we need right now to limit our contact with people and do the job efficiently.
The coronavirus has encouraged us to go digital in our lives, and it is for the best that we continue the same in the future for safe, accurate, and convenient tax-filing.
To know how you can go paperless this season, get in touch with a Solutions Consultant at 855-622-8313.
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