Running a small business is an Olympian feat, so why not take the easy road on some of those complicated tax items? Here are some great tax hacks for small businesses. Pay Attention to the Tax Calendar One of the easiest ways to save money on your taxes as a small business is to make sure you don’t miss any tax deadlines throughout the year. Often, missing a deadline results in penalties and extra fees, which take money out of your business or your pockets. Mark important dates on a physical or electronic calendar, and set up automatic payments if you can. Start Planning For Retirement Have you set your retirement goals? If you haven’t you should. If you invest more into your retirement today, you can often end up with larger tax benefits. Make the most of your expenses by looking into the benefits of upping your retirement savings this year. If You Can, Go for the Home Office Deduction The home office deduction is a tricky one. But that doesn’t mean it isn’t worth looking into. If you have a home office, whether it looks like a professional office or it’s a modified closet, you can take this deduction if you use that space solely for your business. That means the kitchen table, family laptop setup will not be eligible. But if you have electronics or office furniture that you use for the sole purpose of doing work for your business, it is included in the deduction. There is a new, easier caveat to the home office deduction: rather than figuring out a percentage of your expenses to deduct based on the home space you use for your business, you can simply multiply the square footage of your office (up to 350 feet) by $5, and just deduct that dollar amount. Do Some Good Research on Deductions and Tax Credits There are always ways to optimize your business to secure refunds, or at least to avoid owing taxes after filing. Whether you want to take a deep dive into the IRS tax code or you want to invite your favorite tax professional to lunch, …
I Received a CP01H Notice, Now What?
Have you received a CP01H Notice? In this article, we’ll discuss what that means and how to fix it. What is a CP01H Notice? If you receive a CPo1H notice, it means the IRS wasn’t able to process your tax return and they’ve placed a lock on your account because the Social Security Number of the primary or secondary taxpayer you provided on your tax return belongs to someone who was deceased before the current tax year. Here’s what that means for you and how you can fix it if the notice has been sent due to an error. Why Did I Receive a CP01H Notice? The CP01H Notice is generated after the SSN you submitted was compared to the records the Social Security Administration has for you. Once the IRS has determined the SSN on your tax forms is incorrect, they send you the notice and lock your account. This is done to prevent identity theft. This may be a simple keying error, where someone (you or your tax preparer) entered an incorrect Social Security Number for you or your spouse (if you are filing jointly) Find out more about 1099 filing penalties here. Next Steps: Correcting an Error If you think the IRS received records in error, the first step you should take is to contact the Social Security Administration to correct the information. Once the Social Security Administration has corrected the information, you’ll need to follow the instructions on your CP01H notice to file your tax return. Next Steps: Unlocking Your Account Your account is automatically locked when the IRS sends the CP01H Notice, which means you’ll have to take some steps to have it unlocked. Here is a list of all the things you will need to send to the same address of the IRS campus where you filed your return in order to unlock your account, according to the IRS itself: A copy of your CP01H Notice letter A written request to unlock the account A photocopy of any one of the following items: Passport Driver’s license Social Security Card Other valid …
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I Can’t Pay My Business Taxes On Time. What Do I Do?
Don’t panic. You have options. What To Do When You Realize You Can’t Pay Your Business Taxes First, don’t panic. This happens to many business owners. Second, be sure to file on time, even if you can’t afford to pay in full at that time. Next, review your options. Understand that no matter how you proceed, your debt will accrue interest until you pay the IRS in full. And the IRS will not waive interest charges. Double-check your books to see if you can pay the IRS in full before moving forward with payment options. Then, be sure to respond to the IRS’s notice within 30 days of receiving it. This means collecting all of your business’s financial information, including pay stubs, rental or lease agreements, mortgage statements, lease and loan documents, and utilities documents. Call the IRS at 800-829-4933 for assistance. The IRS can help you determine the best payment option for you based on your current circumstances. You Have 4 Options if You Can’t Pay Your Business Taxes On Time Full Payment Agreement Installment Agreement Offer in Compromise or Partial Payment Installment Agreement Temporarily Delay Collection A Full Payment Agreement provides you with additional time to pay your business taxes in full. The timeframe is up to 120 days. An Installment Agreement is a monthly payment plan. You can discuss your needs with the IRS about payment options and set up a payment plan with them. A monthly payment plan may work well with your monthly budget if you cannot pay in full within 120 days. An Offer in Compromise is when you and the IRS create an agreement that determines a reduced payment amount to resolve your tax liability. You are essentially compromising on the debt amount. The IRS will only consider an Offer in Compromise if you are up-to-date on all tax filing and all other tax payments, including quarterly taxes. A Partial Payment Installment Agreement lies somewhere between an Installment Agreement and an …
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