Electronic filing, also known as e-filing, is the submission of tax returns to the Internal Revenue Service (IRS) through an authorized software provider or online platform, including any attachments. You may be wondering if the choice to file business taxes online is the best way to submit a corporate or partnership tax return to the IRS, given that it offers several benefits that have made it increasingly popular over the past few years. Before deciding if you should file business taxes online, you should carefully weigh the advantages and disadvantages of electronic filing. To help you determine whether it is the right one for you, here are some of the pros and cons of e-filing:
What Are the Pros of Choosing to File Business Taxes Online?
- Faster processing and refund issuance. E-filing speeds up the processing of your tax return because the IRS does not have to manually re-enter your information into its system. Since we will input your information into our tax software on your behalf, data is transmitted directly and almost instantly to the servers of the tax agency, saving you time. The IRS sends an electronic confirmation when it receives your e-filed tax return, typically within 24 hours of filing. This allows you to receive your refund sooner, usually within 21 days of filing, instead of six to eight weeks for paper filing. Direct deposit is another way to receive your tax refund; it is safer and more convenient than waiting for a paper check to arrive in the mail.
- Higher accuracy and security. When you file business taxes online, it significantly reduces math errors and information omissions. E-filed tax returns have lower error rates than paper returns, as software checks for common errors and omissions, reducing the likelihood of mathematical mistakes. In addition, our experienced tax accountants are attentive to the most minor details when submitting your tax returns to ensure they are error-free. The IRS also verifies your identity and signature electronically, which reduces the risk of identity theft and fraud. Furthermore, E-filed returns are encrypted and transmitted securely, whereas paper returns may be lost or damaged in the mail.
- Convenience and flexibility. E-filed returns are convenient and flexible because they can be submitted anywhere, anytime, as long as you have internet access and an e-file provider. We use various up-to-date software programs and online services to prepare and e-file your tax return with the assistance of our tax professionals, who can electronically file it on your behalf. You can also inform us to save your return online if you still have pending information and provide feedback and review to make any necessary changes before submission.
- Environmental benefits. Choosing to file business taxes online is environmentally beneficial, reducing paper waste and carbon emissions. According to the IRS, e-filing saved more than 3.8 billion sheets of paper in 2019, equivalent to 456,000 trees. At Cleer Tax, we care more about people and the environment than we do about numbers while ensuring we provide excellent tax services.
What Are the Cons of E-Filing?
- Fees and costs. E-filing of returns may involve fees and costs not associated with paper filing. Our company provides streamlined and cost-effective services to assist early-funded companies in navigating the complexities of the US tax system while saving you time and money. You may also be required to pay for software or online access to prepare your tax return, which you could avoid since we provide services using up-to-date tax software in this constantly evolving tax environment. In addition, some states may assess a fee separate from the federal e-file fee for the electronic filing of state returns. In this case, we can assist you in minimizing your tax liabilities and fees while complying with IRS tax rules.
- Technical issues and glitches. E-filing can sometimes encounter technical problems that delay or prevent tax return submission. The IRS or your state tax agency may also experience system outages or glitches that affect their ability to receive or process e-filed returns. Moreover, there may also be issues with your internet connection, computer, software, or online service that prevent you from completing or transmitting your return. If this happens, you may need to file an extension or a paper return instead. However, you need not worry because we can handle all communications with the IRS and are constantly updated with any IRS-related news and announcements. Our IT and technical support and coordinator ensure that our software and web-based applications run properly.
- Complexity and limitations. E-filing may not be suitable for some taxpayers with complex or unusual tax situations. If you are required to file multiple state returns, attach additional forms or documents, or claim certain credits or deductions, you may not be able to e-file your return, or you may need to use a specific software or service that supports your filing requirements. If this is the case, check the IRS website or your state tax agency website for the list of forms and schedules that are accepted for e-filing, as well as the eligibility requirements and restrictions for e-filing. With Cleer Tax, you don’t need to worry about this, as we have tax experts capable of preparing your tax return accurately, completely, and in accordance with IRS tax regulations.
- Privacy and identity theft. Choosing to file business taxes online may expose you to certain risks of privacy breaches and identity theft, especially if you use a third-party software or service that requires you to share your personal and financial information with them. To protect yourself, ensure that the software or service you use for e-filing is reliable, secure, and compliant with IRS standards and regulations. When you file business taxes online, you should also protect your computer and internet connection from viruses, malware, hackers, and phishing scams that may attempt to access or steal your information. Since we are dealing with sensitive personal and financial information, we always safeguard and adhere to data protection, along with privacy and security awareness, to ensure the confidentiality of your data. Safeguarding your financial and personal information has been and always will be our top priority.
Can Cleer Help Me File Business Taxes Online?
YES! Every Cleer Corporate Income Tax Package includes both federal and state income tax filings, which are reviewed by our Enrolled Agents, the highest credential earned from the IRS, and approved by you before signing and e-filing. There are rare occasions when a return must be mailed, which we will also do if necessary.
Cleer provides accurate, affordable, and efficient financial and tax services to U.S. businesses and subsidiaries, supporting entrepreneurs to do it right from the start. We also offer all-in-one monthly accounting packages that include monthly statements as well as your federal and state tax returns.
If you have other questions on how to maximize your tax savings, book a consultation to discuss the best structure for your startup business, regardless of which state you register in. We also provide a new company package that includes a tax consultation, bookkeeping, and a chart of accounts set up to help you do it right from the start.