Tax

Business Tax

Basic Hints to Help New Small Businesses

Folks starting a small business are often challenged by their new tax filing requirements. It can be overwhelming to learn about federal tax responsibilities.

The following is a list of basic tips to avoid potential problems:

  • Classify workers properly as employees or independent contractors as determined by law, not the choice of the worker or business owner.
  • Deposit federal employment taxes, called trust fund taxes, according to the appropriate schedule.
  • Start making estimated quarterly payments to cover your own income tax and Social Security self-employment tax liability.
  • Keep good records to protect your personal and financial investment and to make tax filing easier.
  • Consider a tax professional to help you with Schedule C.
  • File and pay your taxes electronically. It’s fast, easy, and secure.
  • Protect financial and tax records to ensure business continuity in the event of a disaster.

Starting a new business? Give us a call today. As always, we’re here to help sort out your tax responsibilities.

Tax

What to Do If You Haven’t Filed Your 2010 Return

The failure to file a federal tax return can be costly – whether you end up owing more or missing out on a refund.

There are several reasons taxpayers don’t file their taxes. Perhaps they didn’t know they were required to file. Maybe they just kept putting it off and simply forgot.

Whatever the reason, it’s best to file the return as soon as possible. If you need help, even with a late return, we are ready to assist you.

Here are some things to consider:

  • Failure to File Penalty. If you owe taxes, a delay in filing may result in a “failure to file” penalty, also known as the “late filing” penalty, and interest charges. The longer you delay, the more these charges grow.
  • Losing Your Refund. There is no penalty for failure to file if you are due a refund. However, you cannot obtain a refund without filing a tax return. If you wait too long to file, you may risk losing the refund altogether. The deadline for claiming refunds is three years after the original due date.
  • Earned Income Tax Credit. Individuals who are entitled to the Earned Income Tax Credit must file their return to claim the credit even if they are not otherwise required to file.

Whether you must file a tax return depends on a number of factors, including your filing status, age, and gross income.

Still need to file a tax return for 2010? Call us today. We can help you file your return and avoid additional fines and penalties.

Business Tax

Tax Benefits for Job Seekers

Some folks – especially these days – are polishing their resumes and attending career fairs in search of employment. If you are searching for a job this summer, you may be able to deduct some of those expenses on your tax return.

Here are six things you need to know about deducting costs related to your job search.

  1. To deduct job search costs, the expenses must be spent on a job search in your current occupation. You may not deduct expenses related to looking for a job in a new occupation.
  2. You can deduct employment and outplacement agency fees you pay while looking for a job in your present occupation. If your employer pays you back in a later year for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year.
  3. You can deduct amounts you spend for preparing and mailing copies of a resume to prospective employers as long as you are looking for a new job in your present occupation.
  4. If you travel to an area to look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area. You can only deduct the travel expenses if the trip is primarily to look for a new job. The amount of time you spend on personal activity compared to the time spent looking for work is important in determining whether the trip is primarily personal or is related to your job search. (If you have questions about how to figure this, call us.)
  5. You cannot deduct job search expenses if there was a substantial break between the end of your last job and the time you begin looking for a new one.
  6. You cannot deduct job search expenses if you are looking for a job for the first time.

If you’d like more information about deducting expenses related to your job search, let us know. We’ll guide you through the process.

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