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.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.