New IRS E-File Mandates: What Business Owners Need to Know
The IRS has introduced new e-filing rules in 2025 that may affect how your business submits important tax documents. Whether you run a small LLC or a growing corporation, it’s important to understand how these updates apply to you.
What Changed?
As of 2025, businesses that file 10 or more returns of any type (including W-2s, 1099s, and other information returns) are now required to e-file. Previously, this threshold was 250 returns, so the change significantly broadens the number of businesses affected.
Why the Change?
The IRS is aiming to streamline the tax process, reduce paper usage, and improve accuracy through electronic filing. While this shift can help reduce errors, it also means that even smaller businesses need to update their systems.
Who Is Affected?
Any business filing a combined total of 10 or more forms per year, including:
Form W-2 (Wage and Tax Statement)
Form 1099-NEC/MISC
Form 941 (Employer’s Quarterly Federal Tax Return)
Form 1095 (Affordable Care Act forms)
How to Prepare:
Check Your Filing Volume: Add up all the forms your business files across categories.
Get Set Up for E-Filing: If you haven’t already, register for the IRS Filing Information Returns Electronically (FIRE) system or use an approved payroll or tax software provider.
Talk to Your Accountant: We can help ensure you’re set up to comply with the new requirements smoothly.
Avoid Penalties
Failing to e-file when required may result in penalties or delayed processing. It’s best to make adjustments now so you're not rushing at year-end.
Need Help?
If you’re unsure whether the new rules apply to your business or how to make the switch, Momentum is here to guide you. We’ll help ensure your filings are compliant and stress-free.