Need help with Small Business Filing Electronically - confused about Large Taxpayer E-file requirements?

So I'm overthinking this, aren't I? I was planning to use TaxAct business version this year but got confused when I saw something about needing to register for e-file. Are you saying the software will handle the electronic filing for me? Also, is there any verification I need to do to make sure my return was actually received electronically? I'm a bit paranoid about the IRS claiming they never got something.

You're not overthinking it - the IRS doesn't make this particularly clear! Yes, tax preparation software like TaxAct will handle the electronic filing for you. The software company itself is already registered as an ERO with the IRS, so you don't need to apply separately. When you e-file through software, you'll receive an electronic acknowledgment from the IRS (usually within 24-48 hours) confirming that your return was received. Most tax software packages allow you to track this status right in your account. Keep this confirmation for your records as proof of filing.

Did you have to upload all your financial documents to taxr.ai? I'm always nervous about putting sensitive business info on new websites, especially with all the scams out there.

How exactly does this service determine what you qualify for? The IRS website is so confusing that I'm skeptical any automated system could actually interpret all their requirements correctly.

They use a secure upload system with encryption, so I felt comfortable with it. You can also just upload the specific documents you want analyzed rather than everything. They're pretty clear about their security protocols if you check their site. For your question about how they determine qualifications, they actually use AI that's been trained on IRS publications and tax code. It was surprisingly accurate - it correctly identified that my business structure (also an S-corp) just needed regular tax software for e-filing, not an ERO application. They cite the specific IRS rules and publications so you can verify everything yourself.

Wait, how does this actually work? The IRS phone system is notoriously impossible to get through. Are you saying this service somehow jumps the queue?

Sounds like another scam service taking advantage of the IRS's terrible customer service. I'll believe it when I see proof this actually works and isn't just charging people for something that should be free.

It uses an automated system that navigates the IRS phone tree and holds your place in line. When an agent is about to pick up, it calls you and connects you. No queue jumping - you still wait your turn, but the service waits on hold for you instead of you having to do it yourself. I was skeptical too before trying it. I've spent literal days of my life on hold with the IRS over the years. The service delivered exactly what it promised - I got connected to an agent in about 15 minutes when I had previously been trying for hours. No one should have to pay for better access to a government agency, but unfortunately, that's the reality of the current system.

What's the ballpark cost for having a CPA handle an 1120S for a small business? My biggest concern with hiring someone is cost since we're pretty straightforward (just retail sales, no crazy deductions or situations).

For my business, which is similar in size to yours (about $280K in revenue), I pay around $1,200 for the 1120S preparation and filing. That includes quarterly check-ins and some basic tax planning. I know that might seem expensive compared to software that costs $150-200, but the CPA found enough legitimate deductions to more than cover her fee. The peace of mind is the biggest benefit though. No stress about making mistakes or missing deadlines. Plus, if there's ever an audit or question from the IRS, she handles all communication. For me, the cost is just another business expense that actually provides real value.

Great point! I use Drake Software for my small business and it handles all the business forms including 1120S. It's less known among casual users but very popular with tax professionals. The interface isn't as pretty as TurboTax but it gets the job done at a reasonable price.

Thanks for the Drake recommendation! I'll check that out for next year. I ended up using TaxAct Business which worked fine but was a bit more expensive than I expected. The e-file went through without issues though, and I got my acknowledgment from the IRS within a day.