Do you know the Benefits of Electronic Filing?

Do you know the Benefits of Electronic Filing?

September 20, 2017

On the surface, nearly every tax specialist will tell you the same three basic benefits of electronic filing: One, you’ll get a faster refund; two, you’ll get a proof of receipt by the tax agency; and three, it’s less cumbersome and more convenient than paper filing.

While all that’s true, there’s a whole lot more you should know about the benefits of e-filing than just those three general statements, especially with these important filing deadlines that are coming up:

September 15, 2017

  • 3rd quarter estimated-tax payments due for the 2017 tax year
  • Final deadline to file the following tax returns for calendar-year taxpayers for the year 2016 if a valid extension was filed:
    • S corporations returns on IRS Form 1120S,
    • Partnership returns on IRS Form 1065, and
    • Trust returns on IRS Form 1041.

October 1, 2017

  • Deadline for self-employed persons or small employers to establish a SIMPLE IRA plan for the year 2016

October 16, 2017

  • Final deadline to file individual tax returns for the year 2016. (Forms 1040, 1040A, 1040EZ)
  • Final deadline to file C corporation income-tax returns on IRS Form 1120 for the year 2016, for corporations with a December 31 fiscal year-end. (Final deadline for a C corporation with a December 31 fiscal year-end to fund a SEP-IRA or 401(k) Plan for tax year 2016, if the C Corporation requested an automatic extension of time to file its tax return.

Now, more than ever before, we are reminded about the importance of e-filing and how it is so beneficial to the taxpayer as there are many benefits to filing your taxes online.

Please note the following is for area affected by Hurricanes Harvey and Irma:

Due to the impact caused by Hurricanes Irma and Harvey, the IRS has extended 2016 business  tax returns to January 31, 2018, for taxpayers in the areas affected by the two hurricanes.

Other September 15, 2017 deadlines  the IRS has extended to January 31, 2018 for taxpayers in the areas affected by the two hurricanes are:

  • 3rd quarter estimated-tax payments due for the 2017 tax year
  • Final deadline to file the following  tax returns for calendar-year taxpayers for the year 2016 if a valid extension was filed:
    • S corporations returns on IRS Form 1120S,
    • Partnership returns on IRS Form 1065, and 
    • Trust returns on IRS Form 1041.

No extension of  the October 1, 2017 Deadline for self-employed persons or small employers to establish a SIMPLE IRA plan for the year 2016, has been issued.

The October 16, 2017 deadline has been changed by the IRS to January 31, 2018, for properly extended 2016 C corporation and personal tax returns, for taxpayers in the areas affected by the two hurricanes. This includes: 

  • Final deadline to file individual tax returns for the year 2016. (Forms 1040, 1040A, 1040EZ)
  • Final deadline to file C corporation income-tax returns on IRS Form 1120 for the year 2016, for C corporations with a December 31 fiscal year-end.
  • Final deadline for a C corporation with a December 31 fiscal year-end to fund a SEP-IRA or 401(k) Plan for tax year 2016, if the C corporation properly filed an extension of time to file its tax return.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at (866) 562-5227.

Once you are familiar with the advantages of electronic filing, there is a pretty good chance that you will put down the pen and paper forever. Here are some of the biggest advantages of electronic filing.

Faster to file means a faster refund

The last thing most people want to do is spend days or weeks sifting through papers to file their income tax return. When you opt to file your taxes online, it speeds up the whole tax-return filing process, enabling the IRS to process your return and refund faster.

For example, within three days of electronically filing a return, our office obtains a notice either that the tax agency accepted the return or we receive an explanation of why the tax agency rejected it. If the agency has rejected the return, we can correct any issues with the return and then electronically re-file the corrected return within one day. Reasons for rejection can include having two members of a family claim the same deduction in the returns of both members. With a paper return, the tax agency can take two months or longer to notify the taxpayer of any issues.

Provided there are no issues, if a refund is due, taxpayers receives their IRS refund by direct deposit within three weeks after filing a Form 1040 electronically, as opposed to within six to eight weeks after they file a paper return. Because the tax refund will be deposited into your bank account by direct deposit, you will have immediate access to the funds.

Tracks & Organizes Your Records

When you electronically file your taxes, you are creating a permanent electronic record for your use in the future. If a question comes up about your tax return, you will not have to dig through filing cabinets or giant stacks of paper. Instead, you can pull up your information on your computer and get to work right away.

Bigger Refunds

Most taxpayers find that having their tax returns prepared by experienced, professional tax accountants and filed electronically gives them the chance to take advantage of more tax credits and more deductions than the taxpayers would know how to claim in returns they prepared themselves. For example when we file on behalf of a client, our tax preparation programs help us identify potential tax benefits you might be eligible for. In turn, you may receive a larger tax refund or end up owing less money.

Greater Accuracy

It should go without saying, but every tax return preparer needs to make sure that the tax return is 100% accurate. When you have your return prepared by a professional tax-accounting firm, this accuracy is much easier to achieve, because our firm  takes all of the guesswork out of the tax return preparation. You won’t have to worry about which tax forms you need – that’s where we come in.  We will show you the way.

Greater Security

By using a tax professional like Louis Mamo & Company, you gain assurance that your tax return data is transmitted to the IRS under rules and procedures that ensure the confidentiality of your tax information. Additionally, our programs are equipped to prevent unauthorized people from seeing the data sent to or from the IRS or any State agency. Once your tax information has been transmitted to the proper agency, any data that is sent back to us goes through the agency’s electronic filing network. This network does not use the Internet. It is a private network designed to meet the highest security standards.

There are many advantages to filing taxes online. With all of these benefits in mind, it is hard to imagine that anybody would want to file using paper tax forms. To learn more about electronic filing or to schedule a no-obligation discussion with one of our tax professionals, please call Louis Mamo & Company at 954-942-1120 or 702-931-2022.