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A Helping Hand With Taxing Matters
Inc. asked 12 small business owners to evaluate the most popular tax advice Web sites.
Published March 2001
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Tax pointers are available from several online sites at no charge. Twelve CEOs assess what the advice is really worth
Print neatly. That's the kind of advice that the IRS considers a "dynamite" tax tip, Dave Barry once wrote in his Miami Herald column. "If you ask them a real tax question, such as how you can cheat," Barry said, "they're useless."
The IRS won't tell you how to cheat, but it does attempt to mitigate the tax-filing (if not the tax-paying) ordeal by offering a helping hand, and now it does so online. In partnership with the Small Business Administration, the IRS makes tax information for business owners quickly and easily accessible on a Web site titled Small Business Corner ( www.irs.ustreas.gov/bus_info/sm_bus). The site offers the government's latest intelligence on such things as its rules for business-expense deductions and what the tax agency considers the best record-keeping systems for small companies.
If the IRS is the authoritative source of tax information, is there any reason to look elsewhere on the Net for tax expertise? Several privately owned sites say yes. Each site has its own spin, depending on what group it aims to attract -- a general small-business audience or merely start-up entrepreneurs, for example. Like the IRS site, the private offerings are free. They contrast with the tax-prep sites, such as Intuit's TurboTax or H&R Block's TaxCut, which enable users to fill out their tax returns online for a fee.
To determine which of the tax-advice sites were worthwhile, Inc. asked 12 small-business CEOs to evaluate seven of the most popular ones. Two of the sites belong to Big Five accounting firms: Deloitte & Touche's Dtonline.com and Ernst & Young's TaxCast.com. Individual accountants operate others, including TaxMama.com, which began as an online newsletter. Another site that was a newsletter before it evolved into an in-depth source of complex tax matters is TaxProphet.com. It has 40,000 users and registers about 300,000 hits a month, according to tax lawyer Robert L. Sommers, who runs it.
Although the sites don't charge user fees, some make money by selling ads posted alongside the tax advice. Others are marketing tools. For example, Sommers, who's also a columnist for the San Francisco Examiner, says that TaxProphet.com brings in clients for his law practice -- and generates ideas for his column. Sommers claims that even taxpayers who have the assistance of a certified public accountant can benefit from consulting the tax-code nuances laid out in TaxProphet.com. "At tax time, CPAs are working 18-hour days and may not have time to ponder the gray areas, like whether you need a W-4 for the Israeli teacher you employed or if a treaty with Israel makes that unnecessary," he says.
Traffic is heaviest on the sites in the run-up to the April 15 tax-filing deadline, but they post information for all seasons. One tip on TaxMama.com last fall, for instance, suggested that tax-payers consider charging business expenses to a credit card up until December 31, 2000. The charges are deductible on the 2000 return, even if they weren't paid before year-end.
If you're perplexed by some tax wrinkle or want an update on lawful tax-avoidance schemes, which of the seven sites is your best bet? Here's what our CEOs had to say.
www.bankrate.com
What it's good for: A well-organized, clearly defined primer. "The entire site has a lot of value," said one CEO. Bankrate.com contains a Calculations section, which is useful for computing gross profit margins and a variety of business ratios.
Don't waste your time if: You want a hard-core, business-oriented site or you're a lender or you're doing tax work for a financial institution.
What our CEOs had to say: "It will make my favorites list," commented one reviewer. A second panelist said, "This site is easy to navigate, easy on the eyes, and gives you a good, brief understanding of each topic."
What you ought to know: The site's owner is Bankrate Inc. (formerly known as Bank Rate Monitor), based in North Palm Beach, Fla., a longtime publisher of financial information. Bankrate.com's content now appears in the Money section of Usatoday.com.
www.dtonline.com
What it's good for: A guide for personal financial planning. It also contains useful tidbits, including a schedule of gift- and estate-tax rates and a rundown of 10 "essential" practices for growing a company.
Don't waste your time if: You need access to tax schedules or links to other sites.
What our CEOs had to say: "One visit was all it took" to sour one CEO on the site because he found it lacked forms that he could download. A fellow panelist, however, said the site was "very informative, especially for small businesses."
What you ought to know: Dtonline.com contains a weekly online missive, "Tax News & Views," a Deloitte & Touche compilation of the latest tax news from Washington.
