Millions of Americans rely on electronic tax filing every year. Although dealing with federal IRS forms can be stressful, filing a return online is much more convenient than handling it by mail. Both federal and state taxes can be tackled with the right software program. As you likely know, these programs follow all guidelines required by the Internal Revenue Service. You simply need to know your annual income, and any expenses you can itemize in order to get a better return. Here are a few terms you should know when filing your personal or business taxes electronically.
Exemptions – This is the amount of money taxpayers can claim for any eligible dependents, such as kids and spouses. Personal and dependency are the two types of exemptions. Each exemption claimed will reduce the amount of income that is subject to tax.
Indirect Tax – A type of tax that can be shifted to others. This often includes business property taxes, regardless of whether they are state or federal.
Protective Tariff – This refers to a tax that is levied on any imported goods. The purpose of this tariff is to reduce the domestic purchases or consumption of products and goods that are manufactured in foreign lands.
Refundable Credit – If the amount of credit is greater than the state or federal taxes owed to the IRS, a refund or unused credit is given to the taxpayer.
Regressive Tax – This is a tax that takes a greater percentage or portion of income from low-income groups than it does from high-income groups.
Interest Income – The amount of income a person gets from his or her bank accounts or any money he or she has lent out.
Filing taxes every year may seem like a daunting task, but it can be made easy with electronic filing. Taxes are monies owed to the government on one's incomes, property, and sales. You have a choice whether to do your own taxes each April, or hire an accountant or firm to handle them for you. Either way, tax payers can file electronically from a computer to save paper and time.
This alternative to mailing paper returns provides both convenience and accuracy. You can even get your tax refund deposited directly into your account instead of waiting to receive a paper check in the mail. Working in conjunction with the Internal Revenue Service (IRS), this electronic filing system applies to both state and federal tax returns.
In the United States, right around the time of the Civil War, a graduated taxation method began to arise, wherein people paid a percentage of what they made. Things have changed since then in the way people prepare and file taxes. With the advent of electronic filing, or e-filing, which came into being about 20 years ago, it became less cumbersome to prepare and file taxes on the Internet.
Online filing is for individuals who need to submit taxes, small business professionals, and large corporations. The software used may vary by city or state. Your accountant can help you with this endeavor, or you can take care of tax preparation and filing from the comfort of your home.
Once the return is received, a proof of filing is issued to notify the tax payer of his or her status. Online returns feature all the same line items as paper forms, taking into account deductions, income, charitable donations, and the like. Tax payers can also file for deadline extensions if they can't meet the April 15th filing date.