This post is by Bruce Senti of Aatrix State and Fed Payroll Reports
State and Federal eFiling requirements are mandating more businesses to eFile payroll reports and payments every year.
More than a dozen states either lowered the threshold for employee count requirements or outright mandated that businesses eFile wage withholding, unemployment, and new hire reports.
The federal government requires virtually all employers to make withholding payments electronically.
The efficiencies provided government agencies by requiring eFiling will continue the trend towards requiring business to file reports and payments electronically.
Electronic tax administration is the foundation for a modernized IRS that provides secure, convenient, timely and accurate services to taxpayers, and to the tax professionals and IRS employees who serve them. (IRSOB-E report 2010 page 9)
The full vision for a modern ETA environment goes beyond just e-filing and seeks to make electronic interactions among taxpayers, tax practitioners, and the IRS the norm. These electronic interactions include the entire range of pre-filing, filing, and post-filing tax activities which taxpayers and their representatives may engage in with the IRS, including the ability to resolve taxpayer account issues over the Internet. (IRSOB-E report 2010 page 9)
The Board emphasizes the need to substantially increase the e-file rate, particularly among businesses filing employment tax returns, because it is crucial to the IRS to achieve the strategic 80 percent electronic filing goal. ( IRSOB-E report 2010 page 39)
“It’s good news for taxpayers as well, whether they be commercial or private filers, most experts agree, businesses that utilize e-filing have a 99 percent accuracy rate,” said David Deeter of Frazier & Deeter LLC.
Source: E-filing Hits Record High | Atlanta Business Chronicle
It is clear that the movement towards electronic filing is more than a trend. It is inevitable that virtually all reporting to taxing authorities will be electronic.
What to look for when choosing an eFiling solution.
With more and more agencies providing an eFile portal online which allows businesses to file reports electronically for free, you may wonder why would an efiling solution have any appeal.
You should look for a solution that has dramatic advantages over the use of the agency sites.
- The interface is very simple. Choose any form from one screen, review/edit onscreen, and simple steps to eFile
- One administrative account to track all confirmations, filings, and payments
- eFiling is completed within the payroll solution without additional exports, typing, and logging into multiple sites
- Reports are filled in automatically with no need for manually transcribing
- Reports are time-stamped and saved on your machine and accessible anytime for review or audit
- Reports are completed using the data within the payroll solution you use
- The solution must guarantee compliance with all legislation, eFile requirements, and form changes.
- The solution should be offered as a subscription service which covers all your filing requirements for a single price. It should include all state and federal agencies you file with.
- It should offer a W-2 eFiling service which allows you to complete all filings as well as employee distribution for less than $4 per employee (the average in-house cost).
eFiling More Than a Trend...
Electronic filing is not going away. In fact, it is the future for virtually all business activity. State and federal agencies are being legislatively and budgetary driven to take advantage of the efficiencies and cost savings eFiling affords them. Take great care in choosing a solution that meets all your needs and has the ability to grow and meet your future needs.