Entrepreneur Daily:
If you get stressed at the mere thought of filing your taxes, you’re not alone. According to a Gallup Poll, 62% of small-business owners named taxes as their top concern. If you’re looking for some guidance this tax season, check out this interview with Barbara Weltman, author of J.K. Lasser’s Small Business Taxes 2008. Weltman, an attorney and expert on tax and small business, shares tips for simplifying the filing process and names some of the most commonly overlooked small-biz deductions. Here are Weltman’s tips for beginning the filing process:
* Gather your tax records. Organize your business receipts and canceled checks according to expense categories, like travel and entertainment costs and supplies. Update your books and accounts (enter all transactions through the end of the year and reconcile your bank statement through year-end). If you work as an independent contractor, make sure you’ve receive a Form 1099 reporting your earnings to the IRS.
* Learn about new tax breaks on 2007 returns, so you won’t overlook any deduction or tax credit opportunity. For example, the standard mileage rate for business use of your personal vehicle is 48.5 cents per mile in 2007 (up from 44.5 cents per mile in 2006) if you don’t deduct the actual cost of using your vehicle for business. The domestic production activities deduction - a write-off for businesses that produce things in the U.S. - is 6% of qualifying business net income in 2007, double the deduction rate allowed in 2006. Husbands and wives who co-own a venture and who file a joint return can opt to file Schedule Cs instead of filing partnership returns and Schedule K-1s.
* Decide how to prepare your return. If you use an accountant to prepare your return, arrange a meeting as soon as possible; don’t leave this until April, or you’ll probably need to request a filing extension, which will delay receipt of any refund. Or, if you prepare the return yourself using tax software or an online solution, make your choice now so you can begin to input your information and avoid any last-minute rush.
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