The U.S. Department of the Treasury announced two initiatives aimed at simplifying the way small businesses, individual taxpayers and tax preparers file and pay their federal taxes.
The initiatives include:
- Enhanced batch provider software for tax professionals -- New software will allow tax preparers to make large numbers of payments on behalf of clients with the single click of a mouse by using the Electronic Federal Tax Payment System. The application's improvements include electronic registration and enrollment, real-time payment and enrollment data, real-time file transmission and replication and enhanced report generation. The software can be downloaded at www.eftps.gov, under "What's New."
- Paying electronically -- Under new temporary and proposed IRS rule changes, nearly 950,000 small businesses are eligible to file and pay taxes once a year using new Form 944, rather than quarterly using Form 941 Eligible businesses are those with an estimated employment tax liability of $1,000 or less.
"EFTPS had a tremendous year in 2005," said Treasury fiscal assistant secretary Donald Hammond, in a statement. "Taxpayers paid $1.87 trillion using EFTPS last year, up 16 percent from 2004, and the number of payments rose 11 percent, to 80.4 million."Hammond said he expects use of the system to increase again last year, and noted that in addition to the benefits to users, it costs the government 53 cents less to process an electronic payment than it does to process a payment made using a paper coupon or paper check.
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