Last Minute Tax Tips for Small Businesses

Tax day is just nine days away. Eeeeeeeeek! If you’re like me, you’ve just begun to sort through your receipts and 1099s. I haven’t even gotten to working on the actual form. If you’re still working on your taxes, here are some last minute tips for small businesses, such as freelancers, from the people at the National Association for the Self-Employed:

– Check for hidden deductions: There are a number of deductions that small-business owners and the self-employed forget when filing taxes. If you work out of your home, your office may qualify for a deduction. Do you drive to the post office or a client site? Those miles may add up to a sizable deduction too.

– Retirement Savings: Retirement savings, such as SEP contributions and IRA deposits, are deductible for last year’s tax return up until April 15, 2009. That means you can count money deposited into these
accounts, up until the day you file your 2008 tax return. In the case of SEP contributions, those can even be made up until an extended due date, as late as October 15th.

– Filing Date: If, despite all your rushing around, you still can’t make the April deadline, relax. All tax filers can get an automatic 6-month extension by filing Form 4868 by April 15th, which you can download from the IRS Web site at http://www.irs.gov/. However, an extension of time to file is not an extension to pay. If you do not send the IRS what you think you owe, you’ll be stuck with late fees and interest.

– Proofread the form: Most of the mistakes on tax returns are simple addition and subtraction errors. Check your math. Then, check your math again.

– Start thinking about next year: While micro-business owners may be tempted to finish their return and not think about taxes again until next year, now is a great time to reflect on how to reduce your 2009
tax liability. Consider deductions for a home office or employing your children; create a health reimbursement arrangement, which would enable the business to reimburse bona fide employees for all out of
pocket medical expenses; reconsider the tax implications of incorporating your business; and research retirement plans designed specifically for the self-employed, including an IRA, SIMPLE, SEP, Single 401(k), and Keogh plan.

– Look for help: Sole proprietors doing their own taxes can find help from a number of sources, including the NASE’s Tax Resource Center [tax.NASE.org], where you can ask the NASE’s expert CPAs a question
and hear back within a few business days. You can find Schedule C from A to Z, a line-by-line guide for completing the tax form Schedule C, available online at http://www.nase.org/. The IRS also offers a Web site (http://www.irs.gov/) and toll-free help line, 1-800-829-1040,
for your tax questions.

(photo credit: stock xchng)