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Filing Taxes for Businesses

  1. Form 1065
  2. Form 1120-S
  3. Tax Identification Number
  4. Electronic Filing
  5. Phantom Income
  6. Engagement Letter

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Electronic Filing (E-File): Definition & Overview

Updated: January 30, 2023

Electronic filing, also known as e-filing, is a process of submitting documents to a court or government agency. You typically do this via the internet or other electronic means.

E-filing offers many benefits, so be sure to explore this guide to learn about them. You will also find information on penalties for failing to file electronically, as well as who and what must be filed electronically.

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    KEY TAKEAWAYS

    • E-filing is the process of submitting documents to a court or government agency via the internet or other electronic means. 
    • E-filing offers many benefits, including convenience, efficiency, and speed.
    • Failing to file electronically when you’re supposed to can lead to penalties.
    • You can e-file most documents. Only a select few large items cannot e-file.

    What is Electronic Filing?

    E-filing is the electronic filing of tax returns, tax payments, and other tax-related documents with the IRS. Taxpayers and businesses can e-file their federal and state taxes using IRS-approved software. 

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    Electronic Filing Benefits

    E-filing is faster than paper filing. Once you have submitted your documents electronically, they will process more quickly than if you had filed them by mail.

    E-filing is more convenient than paper filing. You can file your documents from the comfort of your own home or office, without having to travel to the courthouse.

    E-filing is more efficient than paper filing. With e-filing, you can avoid the hassle of making copies and mailing them to the court.

    Penalties For Failing To File Electronically

    If you must file electronically but fail to do so, you may be subject to penalties. For every month that you’re late to file, you’ll get charged a 5% interest on your total unpaid taxes. This penalty caps out at 25%. So if you’re supposed to file electronically, be sure to do so.

    If the IRS owes you a refund, there isn’t a penalty for filing late electronically. 

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    Who must file electronically?

    In general, anyone required to file court documents electronically must do so through the court’s website. This includes individuals, businesses, and attorneys.

    What can be filed electronically?

    Most documents can be filed electronically, with the exception of a few very large documents. 

    Ways to File Electronically

    There are two ways to file electronically: through the court’s website or through an approved e-filing service provider. 

    If you choose to file through the court’s website, you will need to create an account and login each time you want to file a document. 

    If you choose to file through an approved e-filing service provider, you will only need to login once. After you have logged in, you will be able to file any number of documents. 

    Summary

    The e-filing system is a digitized process of submitting information regarding taxes directly to the IRS. It serves to streamline and simplify the tax process, making it quicker and easier for individuals and businesses to file their taxes.

    Failing to file electronically results in additional percentages owed to the IRS. So be sure to file electronically if you’re required to do so. 

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    FAQs on Electronic Filing

    What is proof of electronic filing?

    Proof of electronic filing is a confirmation that you have successfully e-filed your taxes. This can be in the form of an email or printable confirmation page.

    What is the difference between e-filing and manual filing?

    You complete e-filing electronically via the internet. Manual filing is the process of mailing your tax return to the IRS.

    What is the disadvantage of e-filing?

    The main disadvantage of e-filing is that it can be difficult to correct errors on your tax return once you’ve filed it. Moreover, it is usually not recommended for people who are filing their taxes for the first time.

    Filing Taxes for Businesses

    1. Form 1065
    2. Form 1120-S
    3. Tax Identification Number
    4. Electronic Filing
    5. Phantom Income
    6. Engagement Letter

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