The Future of E-Filing Tax Documents

I would imagine that corporate and partnership tax documents soon will be filed with all states requiring them by electronic means. I think that the economic benefits to both parties in the long-run make sense for both parties, and I see this as being almost a sure thing.

Massachusetts has been the pioneer in this process, and other states that in some way mandate the filing of corporate and partnership income tax documents include Alabama, Florida, Georgia, and New York.

Mandates also are affecting tax preparers, this seems to be an area that will certainly grow with time. From Big Four accounting firms to local accounting practices, states increasingly are requiring preparers to e-file client tax documents with their respective revenue departments.

I sometimes wonder why some states mandate e-filing corporate and partnership tax documents on businesses in their state. This seems to not be something that is always going to be looked at favorably upon businesses in terms of new mandates/regulations, but some would argue that having corporate income taxes are already business-killing mandates, so why not have this additional mandate, not that much more trouble, perhaps. Just food for thought.

This blog will now end as being a requirement of my MBA class on technology, but it will continue in some other form to be determined. This was been allot of fun, and I look forward to sharing my thoughts with you in the future.

Peter Wells, August 1, 2010

Reconnecting

I have finally gotten an answer on how I would e-file a few corporate returns that file as single companies at the state level.

As I suspected, I would have to use the same EFIN number as the Federal Consolidated Group these companies file as part of. It is amazing how speaking to former colleagues can help one figure out obscure questions like this.

I look forward to filing my first tax returns electronically, hopefully my company can file a good many this way, even some that we can file voluntarily.

My final blog entry on this topic is coming up, I plan on pulling together everything I have discussed and discussing this subject more fully.

Until next time, peace.

New Technological Tax Topic

I would rate myself, on a scale of 1-10 using excel, as maybe a 7.0 or 7.25. Now that I am comfortable using the vlookup function, perhaps even a 7.5 on a scale of 10.0.

I was given the responsibility to automate how certain state tax data is imported into OneSource, the tax processing software used by my company. I had a very good idea how the automatic importation was supposed to work, but I did not have the know-how on how to do it much more efficiently. Learning vlookup helped, but that was not enough.

After speaking to a colleague who gave me a few tips, it made the process of importing data into onesource much easier, which finished my task. The scary thing is all I wound up doing differently was using paste specials, transposing functions, and a new function where a data field is named to make this so much easier to manipulate data. It saved me probably four hours on my project.

It is truly scary what technology is capable of doing sometimes, and how simple functions can really save lots of time.

Spoke to New York Tax Rep Today

The person I spoke with confirmed that the returns that are filed with the state of New York should be e-filed due to state mandate, there does not seem to be any wiggle room there. Guess all I can do is get the returns ready to e-file by doing all is needed from an administrative standpoint.

I get the idea that e-filing is going to be a pain to do the first time, but it should be a snap once the aggravating things that need to be done to set up e-filing get done.

Onward I Go

I am getting closer and closer to e-filing my first tax return. I am right now in the process of contacting one state to see how firm their e-filing mandates really are.

I have found that the company I am working is, as of now, not e-filing several federal returns that may need to be e-filed in at least one state, regardless of whether or not the Federal return is e-filed. A bit of a pain in the you-know-what, but it is just something that has to be dealt with. What this will require me to do is not totally clear, but it will be resolved one way or another.

Until next time, good night. Hope everyone had a nice 4th of July.

New Issues With E-Filing Tax Returns

I am continuing to discover the ins and outs of e-filing income tax returns. One issue that has come to my attention is the EFIN number, a number that is assigned to corporate and partnership taxpayers by the Internal Revenue Service. This is required to e-file Federal and State income tax returns.

For Federal Tax Purposes, corporate taxpayers that are affiliated with one another usually file under one company and combine each company's taxable income and pay tax based on the combined amount. When I worked for BellSouth Corporation, the federal return that was filed was "BellSouth Corporation and Subsidiaries," which made up many different companies.

For many states, particularly southern states and many northeastern states, companies file returns as separate entities - this means that groups of, say, 10 companies that filed 1 federal return would file up to 10 separate returns in states like Georgia or North Carolina if each company had business operations there.

The question I am having to answer if what EFIN to use for companies that e-file 1 combined Federal return under a common EFIN but must e-file separate state returns. Should the same EFIN number be used for each company? This would seem to be the case, but I guess I will find out for sure soon.

Filing Electronic Tax Returns

I currently am doing contract work for a large partnership based in Alpharetta that is owned by a US company and a British company. One initiative that is being pushed this year is for the state income tax group to file more state income tax returns electronically as opposed to the traditional way of mailing returns that the company prints from a computer after processing the return in tax software. A few states require companies filing partnership or corporate returns to file tax returns electronically, and management sees this trend as growing as time goes on.

I will be updating this blog as time goes on and share what states will be filed electronically as opposed to by mail, and I will discuss why I think states are looking to have corporate and partnership entities file returns electronically.

This Blog Is Up and Running

Good evening. Thank you for visiting my blog. This is my first official posting. More detail is to come in the future. The subject of the blog will center on Technology for 7 weeks or so, then the direction may or may not change.

Hope everyone has a good Tuesday, glad to see New Zealand got a tie out of their World Cup match today, hope Germany and Japan do well in their upcoming matches. A win for France in their next match would be nice, too.