Tax Tips for Entrepreneurs
Benefits of Filing Taxes Electronically
Still filing your business taxes on paper tax forms? It's time to move to electronic tax filing. Here are some of the key advantages of filing taxes electronically.
No matter how you feel about the IRS, one thing you can't deny is their willingness to embrace technology as a tool to help taxpayers maintain compliance and filing accuracy.
In addition to providing a useful online database of tax requirements (www.irs.gov), the IRS has made it easy for taxpayers and business owners to file their taxes electronically.
The IRS has some ulterior motives for embracing technology. Reduced paper costs and streamlined administrative requirements rank high among the reasons why the IRS encourages e-filing for individuals and businesses.
But online tax filing also has some important benefits for businesses. Whether you're a sole proprietorship or a corporation, the benefits of filing your taxes electronically can't be ignored. Here are some of the potential advantages you'll receive by transitioning to e-filing.
- Flexibility. Electronic tax filing gives tax filers the flexibility to delay their tax filing until the last possible moment. Although it's possible to accomplish the same thing using paper forms, e-filing enables last minute adjustments and changes that can be challenging when you're relying on a tax preparer to print out your forms in advance. For businesses, e-filing gives you the flexibility to conduct thorough tax planning and perform review tasks right up to the day of your filing deadline.
- Accuracy. Electronic tax returns tend to be more accurate than paper returns because they require sophisticated tax preparation software solutions. These solutions are updated continuously to reflect the most current IRS tax laws and guidelines. Even more, most e-filing solutions include modules that review your return for errors and highlight audit risks.
- Convenience. Online income tax return filing is undoubtedly the most convenient way to file your tax returns. Rather than messing around with a stack of forms that have been prepared by a third-party, today's software makes it easy for small business owners to prepare their own returns and file them without the printing, packaging and mailing requirements that used to be standard operating procedure during tax season.
- Storage. Electronically submitted income tax returns create electronic records of your company's tax returns. Although the IRS recommends also storing hard copies, you'll have a PDF file of your federal and state returns for electronic archiving. When it's time to complete next year's return, your data will carry forward into the current year's forms.
- Turnaround time. The turnaround time for refunds and other IRS responses is dramatically reduced with online tax filing. Instead of waiting weeks or months for a refund, you'll receive a check or direct deposit in a matter of days.
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