Businesses Will Save Billions by E-Filing Taxes

The IRS has established a goal of 80% for the amount of tax returns it hopes will be filed electronically by the year 2007. States are following suit, offering easy methods for e-filing payroll, sales, and unemployment taxes in addition to income taxes.

Lee Walthall of Nationtax Online, an online provider of e-filing services, presented the AccountingWEB workshop Tuesday, offering suggestions and solutions for implementing an e-filing system for business taxes.

"A typical business files state sales tax at least 12 times a year as compared to the usual once a year filing for personal income tax for individuals," according to Walthall. By e-filing, the IRS estimates businesses will save $16-$18 billion annually. For example, it is estimated that the clerical cost and potential errors involved in paper tax filing cost a business an average of $25 per return. Compare this with a cost of less than $1 to file a return electronically.

The flip side of this time and money saving equation is that the governments can process electronic returns faster, thus freeing up government workers for other tasks and making their jobs more efficient.

Walthall emphasized several points that will help businesses get over the hurdle of e-filing skepticism:

  • E-filing saves time and money over paper filing. Walthall estimates that the average e-filed tax return takes 1-3 minutes to prepare, as compared with 45-60 minutes to prepare a paper return.
  • The latest tax rate changes are incorporated, math calculations are performed automatically and basic information is stored so it does not have to be re-entered each time a file is prepared.
  • E-filing is secure, especially when the e-filing service is offered and approved by or through a state or federal taxing authority.
  • E-filing is accurate, assuming the inputted numbers are correct.

Read the entire transcript of the workshop.

You may like these other stories...

IRS audits less than 1 percent of big partnershipsAccording to an April 17 report from the Government Accountability Office (GAO), the IRS audits fewer than 1 percent of large business partnerships, Stephen Ohlemacher of the...
Legislation coming out of Washington just might reduce homeowners' burden for disaster insurance. It's a topic very much on everyone's minds since the mudslide in Oso, Washington. The loss of human life was...
Divorce is hard, and the IRS isn't going to make it any easier. The IRS generally says "no" to tax deductions that might ease the pain of divorce. In certain circumstances, however, you might be able to salvage...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.