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By Karen White
When you hear the word “clicker,” do you think of the remote control, or the mouse? For an increasing number of people, it’s the mouse, and their clicks are no longer just on the “Add to Cart” icon. Many are using that handy clicker to administer their personal lives, from transferring funds to renewing library books to filing individual tax returns. The IRS received more than 73 million electronically filed returns in 2006 and that number just keeps growing. Programs like TurboTax have made e-file a household word.
But why stop with your personal taxes? E-file is gaining traction among businesses, too, with a growing number of 1065, 1041, and other business tax returns being filed online. And payroll tax returns are no exception. The IRS and a growing number of state agencies accept employment tax returns electronically; in fact, some agencies are starting to mandate it. E-filing is safe; it’s efficient; and when you e-file in conjunction with a payroll product, you get the added advantage of guaranteed accuracy.
Still, some urban myths persist that keep people away from the clicker when it comes to their employment tax returns. However, like the legend of alligators living in the New York City sewer system, when you learn the facts, the myths are quickly debunked. So without further ado, here are the facts:
The Facts
E-file: Its good for more than 1040’s: 1040s seemed a logical place for the IRS to kick off its e-file initiative. But it’s not the end of the story. The IRS put in place a mandate that 80% of all tax returns are filed electronically by this tax year (2007). They can’t meet that objective without going beyond personal returns, and the floodgates are already open. In fact, last year, there were 847 million information returns (such as W-2s and 1099s) filed electronically. Today, you can also file forms 941, 940, and 944 electronically, which is especially handy when you use technology to have data flow directly from your payroll records.
Many states are realizing that e-file can save them time and money and are following suit. While large employers have long been required to file certain returns on magnetic media, states such as Florida and Massachusetts are lowering the bar with new e-file mandates, requiring employers with as few as 10 employees to file with a click.
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