As tax professionals head into the home stretch of their most hectic time of year, one thing will surely ease some of the pressure that they face: e-filing. The IRS may not have known what a blessing it was bestowing upon practitioners and enrolled agents when it first initiated the electronic filing system nearly a decade ago, but most tax pros affirm today that it has saved them time, money, and anguish since they have begun using it.
Despite the apparent convenience that e-filing provides, not all tax professionals have made the transition from paper to computer. If you have yet to make the change, and are unconvinced that e-filing wouldn’t eliminate a headache or two this tax season, let me take a moment to share my experience.
E-filing Saves Time
Those who have tried e-filing only once might disagree. But tax pros who have e-filed for a client more than once quickly find that they do not have to enter in the same client information time and again. Time is truly saved in the long run. Unlike paper filing, the step of actually mailing returns is eliminated — a task that may be even more time-consuming and complex this year with the addition of several new mailing locations. The time that it takes for a return to arrive at the IRS is obviously decreased through e-filing. In the wake of the recent disruption in mail service, the option to e-file is especially comforting.
E-filing Saves Money
Time saved translates to money saved. But it is not just your money that e-filing saves. Millions of taxpayer dollars are saved with e-filing, due to the reduction in processing costs.
Some might argue that the expense of e-filing software decreases the cost benefit of e-filing. However, tax pros will find that it is easy to cover this fixed cost by adding a one-time increase to client fees.
E-Filing is Safer
The embarrassment of having a client’s tax return sent back as a result of one’s own careless mistake is something that we have all experienced at least once. The fact that you may not receive the return until several weeks later only adds to the mess. Imagine this never happening again. It’s possible. The beauty of e-filing is that a form containing a mathematical error or a proofreading mistake will not be processed, but rather will be returned to you within a day.
In the course of the eight years that I have filed electronically, I have seen the capabilities of this system vastly improve. Although e-filing offers the ability to file any type of return, and now even to make payments electronically, individuals can e-file according to their own discretion. Some may choose to use it only for refunds, some for payments, and some, like me, for everything. Rough figures indicate that today, 50% of files are electronically submitted. The day when e-filing becomes as ordinary as – well, paying taxes – can not be far off.
E. Ann Shroll is an enrolled agent and serves as President of the National Association of Enrolled Agents. In December of 2001, Shroll discussed e-filing on “Tax Talk Today,” the Webcast series for tax professionals. The archived program can be viewed at www.TaxTalkToday.TV.