We live in an increasingly digital world – from our homes to our workplaces and everywhere in between. You can bank online, work online, and use a variety of mobile apps for everyday tasks.
As we replace more manual processes with online solutions, it’s no surprise that tax reporting is experiencing the same shift.
Say hello to next generation of tax reporting. Electronic filing (e-filing) quickly is becoming the preferred choice for small businesses. Today, employers are switching from time-consuming, traditional paper filing to e-filing – a streamlined, modern W-2 and 1099 cloud-based process.
What is e-filing and why choose it?
E-filing is the online transmission of required tax information directly to the Internal Revenue Service (IRS) or Social Security Administration (SSA) versus preparing and mailing traditional paper tax forms. The online filing method for W-2s, 1099s and other business tax forms eliminates the need for paper forms or software, and is gaining traction because it’s:
Instead of navigating complicated software programs or mountains of paperwork, online filers can follow a few easy prompts to achieve the same results. Furthermore, in situations where using a single partner is possible, all data entries and uploads are managed within a single system. The time regained from trips previously spent visiting the office supply store and struggling to reprint misaligned forms can be spent on running your business.
The online filer pays only for the number of forms filed, even if it’s only one. In most cases, online tax reporting is more cost efficient since the need to purchase software, bundles of forms that contain documents irrelevant to your filing, reams of printer paper and back-up toner cartridges is eliminated.
In addition to the dollars-and-cents impact of paper filing, there are labor costs to consider. Online filers who select an all-in-one tax reporting partner save on payroll associated with having an employee manually print and mail forms.
Given the amount of sensitive information tax forms contain, such as employees’ annual salary and Social Security numbers, there’s always a risk this confidential data could be mishandled by untrusted sources if it’s left at the printer or opened during transit. Human error could also allow for mismatching forms and envelopes or unintentionally sharing other employees’ information with staff.
Working with a single system that’s run by a specialized and reputable provider, employers can have peace of mind that the filing process is being handled securely and efficiently.
In addition to the numerous prompts that ensure compliance with the latest tax rules, e-file sites compute the complicated calculations. Data entry errors are identified, and mistakes are prevented. In fact, the IRS reports that the error rate for an e-file return is half of one percent.
Online filers are afforded the benefits of regular communication during the e-file process, including email notifications when the IRS and/or SSA receives filings. Plus, the business can check the status of a specific filing any time, from any computer, laptop or tablet.
In today’s Uber and digital era, we anticipate electronic filing will continue to grow in popularity, and as a result, the demand for paper forms will decline. For businesses looking to work smarter – not harder – the smartest alternative to paper is e-filing.
Rick joined Joe Woodard on a web seminar entitled "Prevent the January 31 Nightmare: 5 Things Every Bookkeeper Should Know". You can listen to the archive by CLICKING HERE.
Rick Roddis is president of ComplyRight Distribution Services, a division of ComplyRight Inc., which provides cutting edge compliance products and programs for businesses. Rick began his career as an insurance underwriter, but quickly moved into sales, operations and management roles at different companies that partnered with Intuit, Staples, Office Depot, and others. In 2008, he became president of TFP Data Systems, the leading manufacturer of 1099, W-2 and ACA tax forms, envelopes and software. Over the past four years, he has been focused on transforming ComplyRight Distribution from a traditional 1099/W-2 forms manufacturer to a digital provider of Tax Solutions for businesses thru services like EFile4Biz and several other digital assets.