Tax Tips for Businesses

► Domestic Production Deduction
If your business is engaged in a qualifying production activity you may be able to take a tax deduction for your U.S. based business activities.

► Organizational and Start Up Costs
Have you just started a new business? Did you know expenses incurred before a business begins operations are not allowed as current deductions?

► Business or Hobby?
It is generally accepted that people prefer to make a living doing something they like. A hobby is an activity for which you do not expect to make a profit. If you do not carry on your business or investment activity to make a profit, there is a limit on the deductions you can take.

► Business Eligibility for Schedule C-EZ
Your business may have become eligible to use the abbreviated Schedule C-EZ instead of the longer Schedule C when reporting business profit and loss on your federal income tax return, according to the IRS.

► Deductible Home Offices
Whether you are self-employed or an employee, if you use a portion of your home exclusively and regularly for business purposes, you may be able to take a home office deduction.

► Filing Deadline and Payment Options
If you’re trying to beat the tax deadline, there are several options for last-minute help. If you need a form or publication, you can download copies here. If you find you need more time to finish your return, you can get a five or six month extension of time to file using Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns. And if you have trouble paying your tax bill, the IRS has several payment options available.

► Refund, Where’s My Refund?
Are you expecting a tax refund from the Internal Revenue Service this year? If you file a complete and accurate paper tax return, your refund should be issued in about six to eight weeks from the date IRS receives your return. If you file your return electronically, your refund should be issued in about half the time it would take if you filed a paper return even faster when you choose direct deposit.

► Your Appeal Rights
Are you in the middle of a disagreement with the IRS? One of the guaranteed rights for all taxpayers is the right to appeal. If you disagree with the IRS about the amount of your tax liability or about proposed collection actions, you have the right to ask the IRS Appeals Office to review your case.

► Information About IRS Notices
It’s a moment any taxpayer dreads. An envelope arrives from the IRS and it’s not a refund check. But don’t panic. Many IRS letters can be dealt with simply and painlessly.

► Charitable Contributions
When preparing to file your federal tax return, don’t forget your contributions to charitable organizations. Your donations can add up to a nice tax deduction for your corporation or your personal taxes if you are a member of a flow-through business entity and itemize deductions on IRS Form 1040, Schedule A.

Tax Tips for Finance
► Tax Saving Techniques
Some generally recognized financial planning tools that may help you reduce your tax bill.

► Deducting Mortgage Interest
If you own a home, you can claim a deduction for the interest paid. To be deductible, the interest you pay must be on a loan secured by your main home or a second home. The loan can be a first or second mortgage, a home improvement loan, or a home equity loan.

► Capital Gains and Losses
Almost everything you own and use for personal purposes, pleasure or investment is a capital asset. The IRS says when you sell a capital asset, such as stocks, the difference between the amount you sell it for and your basis, which is usually what you paid for it, is a capital gain or a capital loss. While you must report all capital gains, you may deduct only your capital losses on investment property, not personal property.

► Coverdell Savings Accounts
A Coverdell Education Savings Account (ESA) is a savings account created as an incentive to help parents and students save for education expenses.

► IRA Contributions
If you haven’t contributed funds to an Individual Retirement Arrangement (IRA) for last tax year, or if you’ve put in less than the maximum allowed, you still have time to do so. You can contribute to either a traditional or Roth IRA until the April 15 due date for filing your tax return for last year, not including extensions.

► ROTH IRA Contributions
Confused about whether you can contribute to a Roth IRA? The IRS suggests checking these simple rules

  February 6, 2012     Tax Tips     0 Comment(s)