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Small Businesses Filing Amended Federal Tax Returns to Recover Money


Small Businesses Filing Amended Federal Tax Returns to Recover Money By Darren Oliver April 15th may be gone but, but certainly not forgotten ? especially if you, like millions of small businesses, unknowingly overpaid your federal taxes and can recover money by filing an amended return. According to the IRS tax code, you have three years from the filing date for the tax year in question to file an amended return. For example, if returns for the 2003 tax year were filed on March 1, 2004, the taxpayer has until March 1, 2007 to file an amended return. This same rule also applies if the taxpayer feels they have made errors resulting in a balance. Most business owners either prepare their business taxes themselves or have a tax preparer or accountant do them. With either method, the tax liability can be calculated as higher than it actually is because of missed deductions, unrecognized changes in tax laws or just plain being given bad advice. There are a number of applicable deductions which many tax preparers often miss from home office deductions to self-employed health insurance to personal assets converted to business use. Although some deductions may seem minor, over an entire year, they can add up to thousands of dollars. Another area, which causes many businesses to overpay, is being given incorrect advice by their tax preparer or even the IRS directly. In a poll performed by Money Magazine, the average tax preparer produces an average of 480 returns between February 1 and April 15, making it difficult for each return to get the time and attention it deserves. This same poll also found there was an average discrepancy of 300% between what the tax preparers said was due and what was actually due. Furthermore, in the IRS?s 2001 assessment of their own call centers, they found that 50% of the time, their representatives gave incorrect or insufficient advice. Whether a business owner does their taxes themselves and had to call the IRS for clarification on an issue or a CPA did, odds are the answer was not correct. The United States tax law is one of the most complex in the world. Not to mention, tax laws change every year and have changed tremendously in the last couple of years. Even the best tax preparer, CPA or even IRS representative can, like all humans do, easily make a mistake. In 2002 alone, 3.3 million taxpayers filed an amended return. Samuel Rowley, owner of Muffler Masters in Colorado, was able to recover $14,500 through the filing of an amended return when it was found that he overpaid FICA and payroll taxes. Another small business owner, Karen McClafflin, owner of home-based Secret Canyon Realty, was able to recover $11,000 when her tax preparer failed to include home office and automobile deductions in her past returns. Why is it that when faced with a life-threatening surgery a second opinion is immediately sought after but, when trusting thousands or millions of dollars to an individual or entity, it?s done without question? Businesses must get a second opinion, whether it is done before or after the return is filed, to ensure they are not overpaying or simply to ensure their returns are accurate in all aspects. If not, they could be leaving thousands of dollars on the table.

How Home-Based Businesses Can Avoid Giving Uncle Sam More than His Share


How Home-Based Businesses Can Avoid Giving Uncle Sam More than His Share By Darren Oliver With the rush to file your taxes by April 15th, you probably did not consider the possibility that you overpaid. According to the General Accounting Office, in 1998 alone, there was $311 million paid unnecessarily to the IRS. Do not count on the IRS to tell you if you have overpaid because they are not required to but you can file an amended return for up to three years. Chances are, you either prepare your business taxes yourself or have your tax preparer or CPA does them. There a number of issues surrounding either tax preparation method, which can result in your tax liability being calculated as higher than it actually is including missed deductions, numerous changes in tax laws or being given incorrect advice. As a home-based business professional, there are a number of deductions you are entitled to which many tax preparers often miss. For example, if you run a home office you are entitled to deduct expenses for the percentage of square footage the home office is occupying. Expenses include the combined total of mortgage interest, property taxes, utilities, repairs, etc. For example, if 250 square feet of a 1,000 square foot house is being used for a home office, you are entitled to deduct a quarter of your total expenses. Although some deductions may seem minor, over an entire year, they can add up to thousands of dollars that you are unnecessarily paying the IRS. That is money that you could be using to grow your business. Karen McClafflin, owner of home-based Secret Canyon Realty in Colorado Springs, CO, was able to recover $11,000 when her tax preparer failed to include home office and automobile deductions in her past returns. Another area, which causes many business owners to overpay, is being given incorrect advice by their CPA, tax preparer or even the IRS directly. In a poll performed by Money Magazine, the average tax preparer, prepares an average of 480 returns between February 1st and April 15th, that is a lot of returns in a relatively short amount of time which makes it difficult for your return to get the time and attention it deserves. This same poll also found there was an average discrepancy of 300% between what the tax preparers said was due and what was actually due. Moreover, in a poll of 50 professional tax preparers, consisting of 10 basic tax questions, none answered all 10 questions correctly and only 34 got at least half correct. This problem does not extend to just tax preparers or CPA?s. In the IRS?s 2001 assessment of their own 544 call centers, they found that 50% of the time, their representatives gave incorrect or insufficient advice. Whether you do your taxes yourself and had to call the IRS for clarification on an issue or your CPA did, odds are the answer was not accurate. The United States tax law is one of the most complex in the world. Not to mention, tax laws change every year and have changed tremendously in the last couple of years. Even the best tax preparer, CPA or even IRS representative can easily make a mistake or, forget to use an exemption which could reduce your tax liability. If you have not yet filed your taxes, it is a good idea to get a second opinion from an independent source. The extra money and time spent in doing this could save you thousands. Look for someone or a company who: · Has sufficient years preparing home-based business tax returns · Prepares less than the average number of returns between January and April so that your return gets sufficient time and attention. · Have had clients get a second opinion. In addition, talk to those clients to get there first hand insight. · Is willing to pay for a second review of your tax returns to ensure accuracy. · Is willing to take MSN?s online Tax IQ Test at http://moneycentral.msn.com/investor/calcs/n_taxq/main.asp. Although designed for consumers, this test contains basic tax information that even junior level tax preparers should know. Just as you trust a surgeon with your life, you trust this individual or company with your money and confidential information. Be highly selective and do not be afraid to put them through a rigorous qualification. If they are not willing to participate in your qualification then either they do not know their stuff or, your business is not that important to them. If you already filed your taxes or think you might have missed out on deductions, have been given bad advice or failed to take advantage of a tax law change which could reduce your liability for previous tax years, what can you do? The good news is that by law, the IRS is required, for up to three years, to review your returns and records as many times as needed to find errors. You have the same three years to get a second opinion and file an amended return. In fact, in 2002, 3.3 million taxpayers filed an amended return. Samuel Rowley, owner of Muffler Masters in Colorado Springs, was able to recover $14,500 through the filing of an amended return when it was found that he overpaid FICA and payroll taxes. You may worry that an amended return will trigger an audit however; the IRS itself admits this is not the case. In 2002 alone, 3.3 million taxpayers filed an amended return. The IRS is not the big, bad agency we used to know. In fact, statistics show that audits are down and continue to decline. Businesses throughout the U.S. overpay their taxes to the tune of billions each year and your money could be part of the billions that is overpaid. When it comes to your taxes, always get a second opinion to ensure you are not paying more than you should and, you can even hit pay dirt by looking back.

Alas! In E-Commerce Taxland


In trying to comply with tax laws for your e-business, you may find yourself falling down the rabbit-hole, going through the looking glass, and attending a Mad Tea-Party.

Rearrange Your Affairs For Maximum Tax Savings


One way to maximize your business profits is by reducing your taxes. Frequently, income and other taxes could be lowered significantly if only the taxpayer were willing to plan ahead. By taking some simple steps to rearrange your affairs, you could save a fortune!

Organizing Your Taxes


Does this scene sound familiar? It?s April 7. You haven?t seen the top of your dining room table in two weeks because of the piles of paid bills, receipts, canceled checks, and unidentified cash register receipts covering it. Your head pounds and your stomach churns as the countdown to April 15 begins.

Seven Key Tax Deductions for the Self Employed


As a sole proprietor, it?s wise to familiarize yourself with the some key deductions that may reduce your tax bill for 2004.

How To Set Up A Tax-Saving Bookkeeping System


One of the most important, but least understood or appreciated aspects of any business is its bookkeeping or accounting system. And, because very few people know much about the reasons for a bookkeeping system, most people are frightened by the thought of the work involved in setting up such a system, and the drudgery of daily maintenance.

Knock-Knock-Knock


Knock-Knock-Knock

How to Reduce the Estate Tax Using the A-B Revocable Living Trust


In a past article I relayed the plight of the widow who stated:

Keeping Your Own Money ? NOT Handing It Over To The Taxman


Most people trying to make a crust online (or offline for that matter) are so focused on doing just that, they ignore taking simple steps to ensure that they hang on to just as much of it as they can. Instead, they hand over large lumps of their hard-earned money in tax, usually in one of two mistaken beliefs. Either:

Tax Reform, My Way


We need real tax reform and we need it now. Previous attempts have been made at tax reform, but they have only provided band-aid solutions that have still left us with too many quirks, complication, and read tape. There are several things Congress could do to simply the tax system and benefit the taxpayers and federal budget at the same time.

Surprising Truths About Tax Preparers


Choosing the right tax preparer for your business is a decision best not left until April. A former tax preparer and small business mastermind offers insights into the secret world of tax preparers.

Navigating The Internet Sales Tax Laws


QUESTION: I have been contacted by my local city government to say that my business is scheduled to be audited to determine if I owe any sales tax from items purchased on the Internet. Can they really make me pay this tax? I thought you could buy things online tax free? -- Katie R.

Home Based Business Tax Deductions


Running a home based business reaps many wonderful tax deductions that other businesses some times may not claim. Unfortunately to many small business owners end up paying the government taxes every year because they are unaware or several small business deductions that are available.

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Miami Herald

Mortgage interest, property taxes in play in tax bill
Miami Herald
The drafting of legislative language is a work in progress behind closed doors, but it appears that there have been some key changes in thinking since the White House and congressional Republicans released their “framework” for the tax bill Sept. 27.
Donald Trump gambled you wouldn't care about his tax returns. He was right.CNN
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CNBC

Main Street to Trump: These are the key tax reforms we need to keep the American dream alive
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As President Donald Trump and the GOP rush to push tax reform, small-business owners and advocates are speaking out on what taxing issues are crippling them and the reforms they would like to see. With the sector creating two-thirds of U.S. jobs ...

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Fox News

Ari Fleischer: Taxes and the rich -- Yes, they pay their fair share, and they will after tax reform, too
Fox News
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Bloomberg

Cut Corporate Taxes to Boost Growth (But Don't Exaggerate)
Bloomberg
Like so many things in Washington, the debate over the effects of cutting the corporate tax rate has become too hot for its own good. President Donald Trump and his aides share some responsibility for this due to their exaggerated claims for its benefits.
President Trump: With tax reform we can make it morning in America againUSA TODAY
Do you want to lose this tax deduction? Will your congressman or congresswoman fight it?cleveland.com
This Tax Strategy Failed Last Year, but Should You Do It Again Anyway?Motley Fool
Minneapolis Star Tribune
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Types of investment taxes
Motley Fool
Any time you sell an investment at a gain, you're opening yourself up to capital gains taxes. This is a tax on the profits you make from selling an asset, and the tax rate you pay depends on how long you've owned the asset. If you've owned it for more ...

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CNBC

Wall Street week ahead: Big news for earnings, the economy and taxes
CNBC
Speaker of the House Paul Ryan, R-Wisc., left, Senate Majority Leader Mitch McConnell, R-Ky., and Sen. Orrin Hatch, R-Utah, participate in the Congressional GOP media availability to unveil the GOP tax reform plan in the Capitol on Wednesday, Sept.



Rochester Democrat and Chronicle

Geese get Golisano's goat as billionaire businessman withholds $90K in school tax payment
Rochester Democrat and Chronicle
Billionaire businessman Tom Golisano is challenging his tax assessment again, this time at his Ontario County home on Canandaigua Lake. The Paychex founder is withholding his September school tax of $90,000, pending help from the town of South Bristol ...

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Airbnb Will Collect Taxes for Iowa
WVIK
People in Iowa who rent their homes to visitors will soon have to start collecting hotel and motel taxes. Airbnb has signed an agreement with the state department of revenue that goes into effect November lst. Pleased with the new agreement is Joe ...



CNBC

Sen. Heidi Heitkamp disputes Mnuchin: You can make a tax plan without helping the rich
CNBC
Sen. Heidi Heitkamp says Republicans can cut taxes for the middle class without helping the wealthy. Last week, Treasury Secretary Steven Mnuchin said it is "very hard" not to reduce the burden on the wealthy. Heitkamp is a Democrat up for re-election ...

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CNBC

Trump's shiny tax-cut plan has a $1.5 trillion problem
CNBC
In the name of tax cuts, Congress is speeding toward a budget plan that lets the government collect $1.5 trillion less revenue for the next 10 years. One big problem: The government needs more revenue because millions more Americans retire each year to ...

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