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How & Why You Should e-File Your Business's Taxes This Year
Good news: electronically filing your business taxes can take out much of the tax filing anxiety and streamline this process for your company.
Filing your business taxes or even your personal taxes probably brings up memories of stacks of papers in color-coded folders, boxes of unorganized, slightly crumpled up receipts—and plenty of anxiety, wondering if there’s a better way.
Good news: electronically filing your business taxes can take out much of the tax filing anxiety and streamline this process for your company. If you’re working with independent contractors and will be filing information returns such as the 1099-NEC or 1099-MISC with the IRS, you can file these returns electronically through Tax1099.com.
How To eFile Information Returns
eFiling through Tax1099.com is very simple and affordable. Create an account for free and get started:
Log in to see the various forms offered.
Transfer your vendor recipient data into the forms. This can be done by importing the data in bulk through the list of integrations offered, by importing an Excel sheet, or by entering the information manually.
Check and edit the forms before you submit them.
After all forms are filled out, you can print, mail, or email them.
After you complete the checkout process, they will be sent to the IRS, the state, and recipients.
Using your account, you can access forms you submit for up to seven years. Secure digital storage of your tax filings is important as it’s protected from destruction by a natural disaster, other emergency, or even theft from your office.
Why Electronically File?
eFiling has several advantages to traditional paper filing. Here’s a few of the benefits to eFiling your business taxes:
According to the IRS, 20% of tax papers include errors. Some of these errors include missing spaces and incorrect tax calculations, which can be costly for your business. Comparatively, only 1% of taxes filed electronically include errors. And when an error occurs on an electronic return, resolution is faster as corrected forms can be submitted through the same eFile process.
Filing online reduces processing time. You know the IRS has received and processed your eFile, and the process can be completed in a couple of days. In comparison, the paper filing method might not even reach the IRS for several days. After receipt, paper also requires a manual process by the IRS to scan the data so it can be added to the IRS database. Errors can arise throughout this process, too, resulting in the need to submit corrected forms. Or you may find yourself re-submitting everything should your papers get lost in the mail.
The eFiling process is clear and simple compared to traditional paper filing. Plus, you can transition to a more paperless business and avoid managing a lot of extra paperwork.
Got a question about submitting your taxes? When you file online, any questions you have during the process can be answered quickly through customer service.
eFiling uses modern technology to protect your information, so you can be sure your digital information is safe and protected. The IRS works with states and tax industry leaders to secure your information from identity theft.
Be sure your eFile provider, like Tax1099.com, uses bank-grade security and performs independent audits and penetration testing each year.
The true cost of eFiling is often much less than paper filing due to the replacement of manual, hands-on work required for paper filing. Lower risk for errors, and therefore the need to compile and submit corrections, also reduces the overall cost.
The IRS sends notice when your filing is accepted. When you file via paper, you will not be notified by the IRS if your return was accepted or not.
Still Thinking about Paper Filing?
Paper filing is still done, in part because it provides business owners with a sense of security since the information is not put online. However, paper filing requires storage of the paper filings for future reference. Additionally, physical copies need to be secured and are at more risk of theft than online information.
Moreover, for paper filing, you need to purchase pre-printed forms, print the 1099 form onto the pages, buy envelopes and stamps, and prepare them for mailing. You will likely need to modify your printer settings to accommodate the specific form type and manufacturer. In addition to purchasing the paper and ink to print, you and your team are spending valuable man hours to complete and file returns—all at a higher risk of error.
Another reason for paper filing is considered easier for people who have difficulty understanding technology. You forgo setting up any accounts or keeping track of passwords, but filing by paper may result in frustrating adjustments to printer settings, as well as many more hours spent completing the returns.
There are pros and cons to both tax filing options, and depending on your priorities, one option outweighs the other. If you’re traditional and prefer using as little technology as possible, paper filing is for you. But if you’re looking for a quick and easy way to file taxes, eFiling is the correct option for you.
Concerned about filing returns for your independent contractors? Download a copy of our new eBook, Contractor Hiring Compliance: Navigating the Tax Form Filing Process, to learn what you need to file for independent contractors and how Tax1099.com and BQE CORE can help streamline the process. Click the link below to get your free copy: