Tax season isn’t exactly the happiest time of the year. You see people stressing about how much they owe, while others are biting their nails wondering if their return will help pay for their new car. With the advances in technology and recent tax policy changes, people are finding that paying their taxes online is often required; but are there benefits or problems with paying online?
Read further to understand how online bill paying affects your taxes.
Technology May Make Filing Faster or Slower
The point of paying taxes online is to make the process faster and easier for everyone. In theory, online bill pay gets your taxes in quicker and even makes it easier for you to receive your return sooner. Keep in mind that technology can fail, so it’s always wise to follow-up with your online tax payments and save any records that the online bill paying program gives you.
If technology fails you and you don’t have the documentation to prove that you paid your taxes on time, you may face severe penalties. Forbes explains that there are numerous penalties for paying your taxes late, such as high late fees and being tracked down by the IRS.
You Need Access to the Proper Technology and Software
Credit: johndecember from flickr
Pew Internet states that there is a sharp drop in the amount of people who file taxes online in the above 65 age bracket. Only 3 percent of those people filed online taxes in 2001. It’s also worth mentioning that people in low-income households are less likely to file their taxes online.
If you don’t know how to use a computer or to download a certain software you may find it difficult to file your taxes online. This is one of the main reasons older people might just find it easier to mail in their taxes. Lower income homes might not have access to the most recent technology to file their taxes properly.
It Saves Time and Effort
Paying taxes online allows you to gain back some of the time you might have spent walking to pay your check or going to the post office to mail off the payment. Most local governments make it easy by allowing people to pay via a major debit or credit card, and you might even be able to pay with an ACH payment, directly pulling from your bank account.
It Can Also Save You Money
Credit: alamosbasement from flickr
It depends on whether you are eligible or not, but some homeowners are able to receive property tax deductions if they pay their taxes online. Speak with someone who has a master of taxation to understand which deductions you are eligible for, instead of simply choosing a method for paying your taxes and hoping for the best.
At first glance, paying your taxes online seems fine for saving time, but it might be a tad daunting for those who are not used to working on computers. Keep in mind that it might be worth it to learn how to pay your bills online since you can end up saving money with tax deductions, if eligible.