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A small business blog featuring tips to help entrepreneurs succeed in the small business world. Topics include family business, human resources, marketing, money, networking, operations, ownership, startup, taxes and technology.
Last Minute Tax Tips
As if you haven’t heard it enough, the deadline for filing 2006 tax returns is April 17th this year. And, just to add to the stress, that is only 5 days away. For those of you who haven’t filed your returns yet, or haven’t even started, here’s some last minute tax advice:
Take Your Time
Though the deadline for filing may be haunting your dreams at night, avoid taking shortcuts or fudging numbers, even as estimates, to get your taxes completed quicker. Though the consequences may not be immediate, speeding through your returns will only cost you the pain and suffering of a possible audit down the road. Take your time and calculate each number appropriately. It’s worth the extra effort.
Now, when I say “maximize” I don’t mean make stuff up to get a bigger deduction. What I do mean is to make sure that you are getting all of the deductions you deserve. Some deductions can easily be overlooked, such as the home office deduction or your mileage for going to the post office or a meeting location. Another not-so-obvious deduction is retirement savings. Check out my previous post, The Right Way to Write-off Business Expenses, for more tax deduction possibilities and rules.
Double and Triple Check Your Work
Before signing on the dotted line, double and even triple check all of your calculations. According to BusinessWeek.com, most of the mistakes on tax returns are simple addition and subtraction errors, and they lead to most of the inquiries the IRS makes.
Another option is to use a tax calculating program, rather than yourself and an adding machine, such as TurboTax, which is designed for both personal and business tax returns. In fact, I’ve used TurboTax for the last four years and have been very pleased with the results, especially the audit check, which double checks your return for any problems that might trigger an audit before concluding the process.
File an Extension
If you just don’t feel like you will be able to get your returns completed and postmarked by April 17th, you can file an extension by filing out IRS Form 4868 and submitting it by the deadline instead. Your extension will be for six months, so your returns will be due by October 15th.
It’s important to know that you should submit an estimated payment of the taxes you will owe with the Form 4868. Otherwise you will have to pay a fine and interest on October 15th. It’s important that the estimated amount you pay is no more than $1,000 from what you will actually owe when your returns are submitted. Less than $1,000 short will mean an additional fine, so it is better to over estimate.
If you run into problems or have questions about your return, help is available. The IRS has a toll-free help line at 800-829-1040 or you can access helpful articles on the IRS Website.
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