The IRS launched its Information Returns Intake System (IRIS) for tax year 2022. Then, starting tax year 2023, if you have 10 or more information returns, you must file them electronically. (Learn more about this in our Changes to the Electronic Filing Requirement in 2024 article.) So how do you know if you should use IRIS or eFile360 to e-file your information returns? Let’s compare the two. As a business owner, CPA, accounting clerk, or HR professional, we know you’re busy, so we’ll cut right to the chase: Pros of IRIS Free service E-file any 1099 form Cons of IRIS Only works with 1099 forms You need an Employer Identification Number (EIN), which you probably have. Requires an IRIS Transmitter Control Code (TCC), which you need to apply for. It can take up to 45 days for your TCC application to be processed. eFile360 vs. IRIS IRISeFile360CostFreeStarting at $4.25 per recipientForms1099s1099s, 1098s, W-2, and ACAIdeal ForBusiness owners, government agencies, software developers, and third-party filersBusiness owners, accounting clerks, CPAs, and HR professionalsGetting StartedMust apply for and receive a TCC, which can take up to 45 days, before e-filingE-file right away, no strings attached The primary difference between choosing eFile360 and IRIS is whether you want the responsibility of e-filing tax forms or if you want to delegate that responsibility to a team of experts who have e-filed various tax forms since 2009. The IRS calls the e-filer a “responsible official,” regardless of whether they are an issuer (meaning you only e-file for your business) or a transmitter (meaning you e-file for your business and other businesses). When to Choose eFile360 for Your E-filing Needs If you need to e-file 1098, ACA, or W-2 forms, or you need to e-file quickly, eFile360 is your best e-filing partner. Whether you need to e-file for your business or for your clients, we provide bulk pricing and all data is …
Introduction to Business Taxes: Your Guide to Getting Started
Having an understanding of and effectively managing taxes is not solely a legal responsibility, but also an essential element in successfully operating an ethical business. It safeguards your financial stability, credibility, and long-term growth potential, all while ensuring compliance with tax laws and regulations. In this article, we’ll get you up to speed on the basics of business taxes to help you feel more confident not just during tax season, but year-round. We’ll cover the EIN, business structures, tax obligations, and estimated payments. Do You Need an EIN? An Employer Identification Number (EIN), also known as a Federal Tax ID Number, is utilized to distinguish a business entity for tax purposes. You can apply for an EIN online. Not every business needs an EIN. Determining if you need an EIN depends on your business structure. For example, if your business is a corporation or partnership, you will need an EIN. If your business is a sole proprietorship, your social security number will likely act as your business’s EIN. Check if you need an EIN at this link. You will use your EIN for these purposes: Opening a bank account Applying for business licenses Filing a tax return Making an online payment using the Electronic Federal Tax Payment System (EFTPS) Passing an IRS Taxpayer Identification Number (TIN) Checking program Your EIN may need to change if the ownership or structure of your business has changed. Types of Business Structures When opening a new business, there are many different business structures to consider, each of which has different tax advantages and protections: Here are the main types of business structures: Sole Proprietorship: A sole proprietorship is a business owned and operated by one individual that is not incorporated. The owner has complete control over the business but is personally responsible for all debts and obligations. The owner's personal tax return …
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Unpaid Payroll Taxes: Avoid at All Costs
Do you pay your payroll taxes on time? In this article, we’ll define what payroll taxes are, what it means when they are unpaid, and the penalties for not paying payroll taxes on time. What are Unpaid Payroll Taxes? Payroll taxes are the federal and state taxes that an employer deducts from employees' wages. They are a subset of employment taxes that employers pay. When payroll taxes are “unpaid,” it means the employer neglects to pay them to the relevant tax authorities. Types of Payroll Taxes Employers need to pay many types of payroll taxes on behalf of their employees, including: Federal Income Tax Withholding: Employers have a legal obligation to subtract federal income taxes from employees' wages, which is determined by their W-4 forms and the IRS tax tables. Social Security and Medicare (FICA) Taxes: Employers have the obligation to subtract Social Security and Medicare taxes from employees' wages, along with making a matching contribution on behalf of their employees. State Income Tax Withholding: In states that have income tax, it is the duty of employers to subtract state income taxes from their employees' earnings and submit them to the state tax authority. What about FUTA? Related to payroll taxes is another type of employment tax – Federal Unemployment Tax (FUTA). Employers are required by law to contribute towards federal unemployment taxes, ensuring the availability of financial support for eligible workers during periods of unemployment. However, FUTA is not considered a payroll tax because it is not paid by employees nor is it deducted from their wages. Penalties for Unpaid Payroll Taxes Employers may face severe penalties and repercussions if they fail to pay their payroll taxes. The following consequences are associated with non-payment: Failure to Deposit Penalty: Employers who do not meet the deadline for depositing payroll taxes can incur fines that correspond to a percentage of the outstanding tax sum. The …
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