Ready for your 1/31/14 deadline? The 2013 tax filing deadlines are quickly approaching, including the 1/31 deadline to deliver to recipients. In addition to filing W-2 forms for your employees, your business may need to file additional forms for third-party services that you used and paid for during the 2013 calendar year. For example, if your business paid $ 10 or more in royalties or broker payments, $ 600 or more to a third-party service or any payments to an attorney or fishing boat proceeds, then you are subject to filing a 1099 for these services.
Yes, it’s another task on the January to-do list, but the process has improved over the years. In the 1980s, the IRS worked to improve the inefficient and time-consuming tax filing paper process with an online filing option to eliminate paper storage and cut down on processing time. Enter the beginning of e-filing tax returns, which started in 1986 as a small pilot program. At the start, only five tax preparers in three metropolitan areas – Cincinnati, Raleigh-Durham and Phoenix – agreed to test out the online tax filing system. Once popular tax preparation firms H&R Block and Jackson-Hewitt jumped on board, more individual tax preparers were willing to give e-filing a try. In addition, the e-file seminars morphed into the IRS Tax Forums, which draws an annual crowd of 20,000 tax preparers to learn about the latest tax filing changes, including changes to the e-file program.
With the option to file corrections, an e-file return has a higher accuracy rate compared to paper returns. An e-filed return has an error rate of 1 percent compared to 20 percent for a paper return, according to the IRS. With faster returns and processing, the quick turnaround time prevents the risk of late forms and penalties. In 2011, the IRS hit the 1 billion milestone for individual tax returns received and processed. Today, 91% of all tax returns filed are prepared using online e-filing services and over 122 million returns are e-filed each year. The electronic filing option has evolved into a promising option for both tax preparers and payers alike.