In the context of the financial technology, the new generation companies have emerged as the so called fintech companies which have revolutionalized the traditional financial services. There is nothing in the following list that might have caused an outcry from the purists, but one must mention that the advancement of fintech has been quite apparent in the case of tax payment solutions.
Obviously, one of the most traditional and time-honored processes that American citizens have to face is the tax payment. Nonetheless, emerging fintech companies today are developing integrated and easily navigable systems that can enable persons, firms, and other entities to easily make their tax payments. Continue reading:
The role of fintech in simplifying tax payments
Innovative solutions for Individuals
Many innovative solutions that have now been provided to individual taxpayers by fintech companies can be listed as follows. These platforms are more like tolls through which the payment of taxes is made easier thus not arriving at the point of being a daunting task.
One of these is by Intuit which is TurboTax that offers the user interphase, and a guide that will help a person on how to file for the taxes correctly and within the right time. Most commonly, TurboTax is able to link itself with various institutions so that information regarding taxes are imported and do not require much input from the users.
Additionally, free services such as Credit Karma Tax provide users with comprehensible assistance and even audit help for filing the taxes without the concern of extra charges. Such fintech solutions may contain facilities such as e-filing where individuals are able to file their taxes electronically thereby solving the problem of time and possibly error.
These platforms have gained the attention of the one-time taxpayers as a result of their convenience and effectiveness in meeting the individual’s tax needs. There is another giant of the market – H&R Block, which has changed from the company that mainly provided services of preparation of a statement of taxation to the company that offered an all-encompassing online platform.
H&R Block offers various aids, a number of them being the virtual advisors, to help users while filing their taxes. It also guarantees that consumers can raise any issues that they may likely have in the process of using the innovations through the support of human beings, all these making the user experience pleasant.
Mobile apps which has been adopted by these fintech companies have similarly contributed to easy process of the tax payments. By using mobile apps, it becomes easier for a person to make their tax submissions, mimic within specified time to avoid certain penalties.
Transformative solutions for businesses
Generally, tax management poses great challenges for any business, especially SMEs and considering the numerous types of taxes and their frequency and computation, the aspect can be cumbersome to handle. To this, the fintech firms are coming up with solutions that could help firms manage their taxes and adhere to the legal requirements more efficiently.
Another firm that operates in this area is Avalara which offers solutions for: taxation compliance in the cloud. Avalara’s platform assimilates with countless of other accounting and e-commerce systems where it computes and submits returns to the concerned tax authorities using informations that goes real time.
Also, there are sales tax computation services such as the TaxJar for online businesses for automatic sales tax calculations, reports and filings. This is since TaxJar’s solution is especially useful to e-commerce companies that transact in different states where the rates and requirements of taxation are known to constantly change.
Another relevant application that can be considered as a fintech solution for businesses is QuickBooks developed by Intuit. QuickBooks breaks down the dual purposes of its financial app and accounting solution by providing numerous features ranging from tax processing to filing.
This feature is compatible with all other financial services, ensuring that the business records are perfect and preparing complicated tax reports without stress. This integration is useful for businesses because it frees up the time which is generally spent on putting things in order for tax agents and allows them to focus more on actually filing their taxes.
Also, nowadays, there are providers like Zenefits to help HR and payroll which also offer tax services. Zenefits provides solutions for determining the amount of taxes to be deducted and withheld from the employees’ payroll so that business is on the right side of federal and state laws.
Such automation helps to lighten the workload of the business and also helps a lot to avoid such costly mistakes. Through integrating these fintech solutions, enterprises can leave the issue of taxes to the specialists while engaging in their productive activities.
Emerging trends and future prospects
Thus, as the concept of fintech is rapidly developing, new tendencies are emerging in the sphere of tax payments solutions. One of them is the promotion of the use of artificial intelligence and machine learning in the process of issuing taxes, in order to improve the accuracy of statements on taxes.
AI resident solutions can also scan through petabytes of financial information to find deductions and credits that taxpayers are legally entitle to in order to optimize savings. These technologies also assist in identifying outliers and raised a red flag so that the potential problems would not be audited which leads to penalties.
Another growing phenomenon is noted to be the blockchain technology which is also another segment likely to provide a new path tothe tax payments. For this reason, blockchain can improve the credibility and auditability of payments made to the tax authorities.
It can also assist in making real time tax payments hence avoiding distortions of business cash flow. An example of a company beginning the process of constructing an infrastructure for utilizing blockchain is TaxBit which develops a way to utilize blockchain for the purpose of properly reporting taxes for cryptocurrency transactions.
Also, fintech firms are also placing more emphasis on the interface in their products and services. Considering the evolutionary process of mobile banking and using digital wallets there is the need to provide integration of the tax payment solutions with the regular financial operations.
On this ground, other financial technologies such as PayPal, Square, and other mobile payment systems have integrated services for payment of taxes. Thus, the integration enhances the ease of payment and other related functions giving users more and better options to choose from.
All in all, the further of fintech for tax payments is seemable. This is due to the fact that as the innovativeness of the solutions extends and more parties comprehend their benefits, the common rates of consumption will rise as well.