Attorney and business tax expert Barbara Weltman shares a tax tip a day from April 6 through April 15 on the Inc.com homepage.
Here, check out the tips you might have missed for money-saving ideas you can use this year.
Week of April 12, 2004
April 15: Can't File Today? Can't file your return today? Be sure to obtain an automatic four-month extension by filing Form 4868. Do so online or post the form by midnight. Note: The filing extension does not extend the time for paying taxes. Be sure to pay as much as you can now to minimize interest and penalties.
April 14: File Electronically Use e-file to file your 2003 return. You'll ensure that the IRS accepts it (you get confirmation within 48 hours), and if you're owed a refund, you'll get it in half the time. And you can file your federal and state personal returns in one step. For details, go to www.irs.gov and click on "e-file."
April 13: Recordkeeping Keep your records and receipts. Just because you may have completed your return is no reason to dump your paperwork. Keep a copy of your return (along with proof of filing) forever. Keep receipts and other substantiation for at least three years (more if you have the room), and at least four years for employment-related material.
April 12: Net Operating Loss Discovered that you have a business loss for 2003? You may have a net operating loss, which you can carry back for two years to receive a refund of taxes you paid in those years. This money can be used to help you build up your business now.
Week of April 5, 2004
April 11: Free Help Free help for your small business. The Small Business Administration (SBA) and the IRS have created the Small Business Resource Guide 2004 on CD-ROM. It includes information from various federal agencies and contains forms and publications to help you run your business. To order it, go to www.irs.gov/businesses/small/page/0,,id=7128,00.html.
April 10: E-file Your Return Use e-file to file your 2003 return. You'll ensure that the IRS accepts it (you get confirmation within 48 hours) and, if you're owed a refund, you'll get it in half the time. And you can file your federal and state personal returns in one step. For details, go to www.irs.gov and click on "e-file."
April 9: Watch Out for Tax Scams Don't fall for tax scams being marketed today. For example, one being sold misuses the "corporation sole" laws--federal and state laws intended to support legitimate religious nonprofit organizations. Scammers for $1,000 or more help you form a one-person corporation to act as a "bishop" or "overseer" of a phony religious organization on the theory that you'll be exempt from federal income taxes and that such an arrangement is legal. Nothing could be farther from the truth, warns the IRS. For details, go to the IRS Newsroom.
April 8: Estimated Tax Filing Don't send your 2004 estimated tax payment in the same envelope with your 2003 income tax return. Check for the address you use for each mailing. Note: Some addresses have changed from last year so look for new locations.
April 7: First-Year Expensing If 2003 wasn't your best year, don't automatically elect first-year expensing. Instead depreciate your equipment purchases over a number of years when you'll be more profitable so that the write-off will be more valuable to you.
April 6: Save for Retirement Discovered that you're profitable for 2003 and don't have a retirement plan? It's not too late to set up and fund a Simplified Employee Pension (SEP). Caution: If you have employees, you may have to contribute on their behalf so weigh the cost to your business.
BARBARA WELTMAN is an attorney and a trusted professional advocate for small businesses and entrepreneurs. She is the author with such titles as J.K. Lasser’s Small Business Taxes and Smooth Failing, and she contributes regularly to American Express OPEN and SBA.gov. Her articles have appeared in the Wall Street Journal and U.S. News and World Report. Weltman is also the publisher of Idea of the Day and monthly e-newsletter Big Ideas for Small Business at www.barbaraweltman.com and hosts radio shows and podcasts, including Build Your Business radio. She has been named one of the 100 Small Business Influencers in the U.S. for the third year in a row. @barbaraweltman