With Tax Season quickly approaching, we at the Women’s Business Development Center (WBDC) want to make sure you are the most prepared you can be when it comes to doing your small business taxes. Who better to ask about taxes then the IRS? For that we turn to Yolanda Ruiz, IRS expert and employee and frequent presenter at WBDC workshops on business taxes.
1. What is the number one question you get from small business owners seeking assistance with their taxes?
“Unfortunately, many come to me when they are behind in their taxes asking about payment options. One of our partners noted ‘One of the major obstacles that business owners encounter with their businesses was not being aware of their responsibilities to the IRS. Most are repaying the IRS for lack of paying payroll taxes or estimated tax payments.’ It’s hard to catch up when you fall behind, knowledge is key.”
2. What is a common misconception you see about taxes or the process of filing?
“Trying to reduce your tax bill is illegal. Actually, with tax planning you can legitimately reduce your taxes. Washington is constantly sending out incentives in way of additional write-offs and hiring credits (Section 179, Bonus Depreciation, HIRE). Utilizing these incentives will reduce your tax bill while expanding your business.”
3. What resources are available to small business owners (especially those on a budget)?
“E-news for Small Businesses is an electronic newsletter that comes out every other Wednesday. It will provide you with information on current incentives (additional deductions/credits) for small business as well as free resources. To subscribe go to: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Subscribe-to-e-News-for-Small-Businesses
IRS also has VITA sites that offer free tax help to people who make $51,000 or less and need assistance in preparing their own tax returns. For a VITA site near you, go to – http://irs.treasury.gov/freetaxprep/
The IRS is proud to partner with Center for Economic Progress/ Tax Clinic. They can help you if you have a dispute or problem with the IRS to solve your issues quickly. Also, they will be able to file current and previous tax returns. Call the Tax Clinic at (312) 630-0241 for an appointment, or go to http://www.economicprogress.org/clients/got-letter-irs for more information.
The IRS is proud to partner with The Law Project, a nonprofit that provides free services to qualified business start-ups: http://www.thelawproject.org“
4. What online resources would you recommend?
“The Virtual Small Business Tax Workshop online is composed of nine interactive lessons designed to help new small business owners learn their tax rights and responsibilities. It includes topics such as EIN, Business Structures, Recordkeeping, Classifying Worker and Business Taxes.
Small Business and Self-Employed Tax Center on irs.gov – http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Small-Business-and-Self-Employed-Tax-Center-1
No more spending time navigating the IRS website, all that you need is on this page. “
“The purpose for tax education is not to make you a tax professional but to give you an awareness of your tax responsibilities and the many benefits that are available. By having an awareness of how your business should be run (for tax purposes) you can ensure that your accountant/tax preparer is compliant with filing and payments, you will avoid problems and you will allow your business to grow.”
The WBDC also wants to make sure you and your employees know about the Earned Income Tax Credit, or EITC. If you file as a Schedule C, you as a self-employed individual may be able to receive the credit. Click here to learn more.
The EITC is a refundable federal income tax credit for low to moderate income working individuals and families. With the additional funds, the majority of recipients invest back into their local economy and can truly help grow small businesses. To learn more about the EITC, please click here.