It’s hard to imagine when all taxes were done by hand. Countless hours were required to calculate figures, find the adjusted gross income, take deductions, and even write addresses. Regardless of the advances over the years, doing taxes by hand is still the case today with some forms. We all know about the paper forms needed for continuation of the First Homebuyer’s Credit and the dreaded Amended Return.
Nevertheless, the IRS is making a big push to get everything online, and the future is bright for online preparation. A new law required many paid tax preparers to file for individuals, trusts, and estates electronically starting January 1, 2011.
There are two phases for this new transition. The dates and requirements are listed below:
• January 1, 2011— for preparers who expect filing 100 or more Forms 1040, 1040A, 1040EZ and 1041 during the year.
• January 1, 2012— for preparers who expect filing 11 or more 1040, 1040A, 1040EZ and 1041 during the year.
This law also applies to tax preparation firms as well. Even if one member files less than the threshold, the aggregate of all members together require each preparer to file electronically.
Electronic filing is a working process, but the IRS has definitely taken a step in the right direction. For professional tax preparers, it is extremely important to stay up-to-date with IRS laws and how they affect the new e-filing format. We will be following the most important IRS updates as they pertain to e-filing and keep you up to date on new regulations.
This may sound daunting to some, but it’s actually a great opportunity. In future posts, we will discuss the process of becoming an authorized e-file provider as well.
If you decide that you want to either start a business as a tax preparer or continue the growth of a current tax preparation service, it is extremely important to have the right tools.
Taxslayer Pro provides the tools you need to prepare your clients’ returns properly. Explore the website, watch the demos, and call in with any questions. Make sure to keep checking in for new information regarding professional tax preparation.