To e-file or not to e-file, that is the question. With the September 17 federal corporate tax filing deadline fast approaching, you may be trying to come up with the answer.
For large or midsize corporations, defined as those with assets over $10 million who file more than 250 returns, the decision is easy: Electronic filing of federal business tax returns is mandatory. Smaller companies, as well as partnerships and other unincorporated businesses, can choose between electronic filing and traditional paper returns.
If you fit in the latter category and you’re still on the fence, here’s an overview of some benefits of e-filing.
• Convenience. Say goodbye to the postman, the post office and an extra charge for certified mail. You’ll be sending your return to the IRS right from your computer. Many states also accept e-filed business tax returns. A notice that your forms have arrived will reach you within two days.
• Easier error correction. Generally, common mistakes will generate an error report before your e-filed return is accepted. You can make the correction and re-submit, eliminating future notices for that error.
• Faster refunds. If you’re due a refund, electronic filing with direct deposit can speed your money to you in less than two weeks. Snail mail refunds can take four to six weeks.
As you make your decision, be aware that e-filing may not be available in some situations. For instance, certain forms can’t be filed electronically.
In addition, e-filing doesn’t completely eliminate the need for paper. You’ll want to retain a printed copy of your return in case of computer problems or incompatible software updates.