IRS Has Options to Help Small Business Owners

This blog post was originally published through the IRS Tax Tips service. More information on all of these topics can be found at the Small Business and Self-Employed Tax Center. Small business owners often have a running list of things to do. These include deadlines, sales calls, employee issues, banking, advertising – and taxes. The IRS… Read more »

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This blog post was originally published through the IRS Tax Tips service. More information on all of these topics can be found at the Small Business and Self-Employed Tax Center.

Small business owners often have a running list of things to do. These include deadlines, sales calls, employee issues, banking, advertising – and taxes. The IRS can help with the last one.

Here are seven resources to help small businesses owners with common topics:Tax Tipso avoid

  • Looking at the Big Picture: The Small Business and Self-Employed Tax Center brings information on IRS.gov to one common place.
  • Organizing Tasks: The IRS Tax Calendar for Businesses and Self-Employed helps owners stay organized. It includes tax due dates and actions for each month. Users can subscribe to calendar reminders or import the calendar to their desktop or calendar on their mobile device.
  • Searching for Topics: The A-to-Z Index for Business helps people easily find small business topics on IRS.gov.
  • Getting Information by Email: Small business owners can sign up for e-News for Small Businesses. The free, electronic service gives subscribers information on deadlines, emerging issues, tips, news and more.
  • Watching Videos: The IRS Video Portal offers learning events and informational videos on many business topics.
  • Finding Forms: The Small Business Forms and Publications page helps business owners find the documents they need for the type of business they own. It lists tax forms, instructions, desk guides and more.
  • Meeting in Person or Online: Small business workshops, seminars and meetings are held throughout the country. They’re sponsored by IRS partners that specialize in federal tax topics. Topics vary from overviews to more specific topics such as retirement plans and recordkeeping.

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IRS Announces Filing Date Changes

The following blog post was sent by the Internal Revenue Service with the request that it be circulated to all employers who furnish W-2 forms to employees or 1099-MISC forms to independent contractors.  There is a change in the date when such forms must be filed with the Social Security Administration.  All small businesses should… Read more »

The post IRS Announces Filing Date Changes appeared first on Alexandria Small Business Development Center.

The following blog post was sent by the Internal Revenue Service with the request that it be circulated to all employers who furnish W-2 forms to employees or 1099-MISC forms to independent contractors.  There is a change in the date when such forms must be filed with the Social Security Administration.  All small businesses should review this information to be sure that they are in compliance.

New Jan. 31 Deadline for Employers

The Protecting Americans from Tax Hikes (PATH) Act, enacted last December, includes a new requirement for employers. They are now required to file their copies of Form W-2, submitted to the Social Security Administration, by Jan. 31. The new Jan. 31 filing deadline also applies to certain Forms 1099-MISC reporting non-employee compensation such as payments to independent contractors.taxes-blog-image

In the past, employers typically had until the end of February, if filing on paper, or the end of March, if filing electronically, to submit their copies of these forms. In addition, there are changes in requesting an extension to file the Form W-2. Only one 30-day extension to file Form W-2 is available and this extension is not automatic. If an extension is necessary, a Form 8809 Application for Extension of Time to File Information Returns must be completed as soon as you know an extension is necessary, but by January 31. Please carefully review the instructions for Form 8809, for more information.

“As tax season approaches, the IRS wants to be sure employers, especially smaller businesses, are aware of these new deadlines,” said IRS Commissioner John Koskinen. “We are working with the payroll community and other partners to share this information widely.”

The new accelerated deadline will help the IRS improve its efforts to spot errors on returns filed by taxpayers. Having these W-2s and 1099s earlier will make it easier for the IRS to verify the legitimacy of tax returns and properly issue refunds to taxpayers eligible to receive them. In many instances, this will enable the IRS to release tax refunds more quickly than in the past.

The Jan. 31 deadline has long applied to employers furnishing copies of these forms to their employees and that date remains unchanged.

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8 Small Business Tax Preparation Mistakes to Avoid

This post was written by Caron Beesley and first appeared as an SBA.gov blog on April 2, 2015. Tax time brings with it a sense of urgency and pressure, and mistakes inevitably follow. Tax deductions go unclaimed, paper trails go awry and costly surprises can result. Here are eight of the most common tax preparation… Read more »

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This post was written by Caron Beesley and first appeared as an SBA.gov blog on April 2, 2015.

8 small business tax mistakes to avoidTax time brings with it a sense of urgency and pressure, and mistakes inevitably follow. Tax deductions go unclaimed, paper trails go awry and costly surprises can result.

Here are eight of the most common tax preparation mistakes that small businesses make, plus some tips for mitigating them.

Start a business last year? Write off the expenses

New business owners can write off the expense they incurred before technically opening their doors for business. Don’t overlook this important deduction. Read more in How to Write Off the Expense of Starting your Business.

Car deductions

A lot of confusion exists about what constitutes a legitimate business driving deduction. SBA guest blogger Barbara Weltman clears the air in her blog “Driving for Business.” What is business driving? “When you travel from your office to see a customer or vendor, this constitutes business driving. Whether travel from your home to another location is a business trip depends. If you commute from home to your office (and back), this is a nondeductible personal expense. If, however, you work from a home office for which you claim a tax deduction, then travel from home to any business location (and back) is treated as deductible business driving.”

The mileage deduction for tax year 2014 is 56 cents per mile.

Another big mistake that business owners make is to limit their deductions to mileage. If you can prove that they are business expenses, you can also deduct other costs including gas and oil, tires, insurance, lease payments, tolls and parking fees. Read more.

Don’t forget the small stuff

Petty cash purchases, magazine subscriptions, educational classes and more. These “small” expenses can add up quickly. Make sure you track all your expenses and check with your tax advisor about what you can and can’t deduct.

Don’t exaggerate your deductions

Your accountant can ensure you don’t overdo or exaggerate your deductions – something that can raise the possibility of an IRS audit. For example, many small business owners mistakenly assume that they can deduct 100% of meal costs while traveling or client gifts. They are actually only partly deductible.

Likewise, if your expenses are a lot higher this year than last or not considered typical for your industry or business type, the IRS may get inquisitive.

It’s not all about the IRS

The IRS is only one piece of the tax pie; don’t forget about your other tax obligations – property, payroll, local taxes, excise tax, self-employment taxes, etc. These can all come back to bite you if you aren’t compliant in a timely manner.

Separate personal and business

Intermingling your personal and business bank accounts is a big cause of confusion around tax time, making it hard to track income and expenses. Furthermore, if you operate a home business, make sure you keep that space distinct and separate from the rest of the home so that you can correctly claim the home office deduction.

Avoid payroll mistakes

Payroll tax compliance is something that many small business owners struggle with. The financial consequences of getting it wrong aren’t pleasant either. Statistics show that approximately 40 percent of small businesses incur an average of $845 per year in IRS penalties. To make sure that your payroll taxes are deposited correctly, outsource your payroll function to a payroll company. The benefits often far outweigh the fees. Read more about the five payroll tax mistakes to avoid from Barbara Weltman.

Keep your records up-to-date

This is a common problem for small businesses and often leads to missed opportunities for reducing your taxable income for the year. Make sure your expenses are reconciled, tracked and supported with receipts (the IRS requires it). Spend time each week to review your accounts – receivable, payable, credit card transactions, cash flow, etc. if your business is growing, consider accounting software (which synchronizes all your financial transactions and activities in one centralized dashboard) or retain the services of an accountant.

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