by Beau Scully
There are many benefits in filing tax returns online. For one, free online tax returns are processed faster compared to those that are filed on paper. Since it is automated, you will know immediately how much you owe or are owed. You will receive your income tax return faster if you file your income tax returns online. Also, you can check and monitor your statement of accounts, payment history, and what you need to pay or collect at your most convenient time. Finally, errors in filing can be detected and edited immediately which saves you time and effort. What you need to understand is that when you file by mail, it will be reviewed and entered in the system manually. This increases the chances that your return will be kicked out.
Now that you know the advantages of filing old tax returns online, what should you do next? If this is your first time to use any government online service, you will need to register for Self Assessment Online. The Government Gateway, the online registration government service, will send you an activation PIN through your home address and a User ID which will be sent separately for the security of your account.
You will also need to prepare your Unique Tax Payer Reference (UTR) number. You will find this information in your tax return. You will also need your postcode or your National Insurance Number (NINO).
Registering is easy. The least easy part is making sure you avoid the common mistakes in filing online federal tax returns. Let us consider some of the common mistakes that tax payers make. Knowing and understanding these mistakes may save us time, effort, and money.
The most common mistake in filing taxes is math errors - either the numbers are reversed, left out, or simply did not add up right. Make sure to go through the figures again and again. Also, make use of the calculator in your computer.
Another mistake is when we take details for granted. Even a single digit that is transposed can make a big difference. So be sure to double check so you can make sure that the right figures are being sent.
Most people think that under-reporting their income is a good idea. The truth is this only increases your chances of being audited. If you think you can get away by reporting an income with larger itemized deductions, think again. Your income to expense ratio will appear suspicious and may lead to auditing.
As mentioned earlier, filing your income tax return online gives you room to make mistakes. Just make sure you have all the right information before you press that submit button and you will be fine.