A Helping Hand With Taxing Matters
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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.
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.
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.
What it's good for: Comprehensive tax information furnished by the IRS and tailored for small businesses, plus links to other useful tax-related sites, such as www.tax.gov (which covers the tax- and wage-reporting basics).
Don't waste your time if: You seek tax loopholes.
What our CEOs had to say: "Excellent tax information for small businesses," one panelist said. It's great for "getting a handle on tax issues relating to a start-up," said another. Still, one CEO disliked the site and said he couldn't find valuable advice there.
What you ought to know: The IRS also offers online sites not specifically devoted to small businesses, including www.irs.ustreas.gov, a guide for filing electronic tax returns.
What it's good for: News and tax tips are updated daily. It also has a host of useful links to other sites.
Don't waste your time if: You need answers to specific tax questions.
What our CEOs had to say: They agreed that the site is valuable mostly as a "link farm," in the words of one of them. They generally faulted its design as lacking pizzazz.
What you ought to know: The genesis of the site is the Small Business Tax Review, a newsletter published since 1980 by the A/N Group, in Melville, N.Y., a provider of tax news and analyses for small businesses.
What it's good for: Tax-law summaries and a trove of tax documents mostly suited to accountants and financial planners.
Don't waste your time if: You want a fast, easy-to-understand tour through the tax landscape. One business owner said the site, though rich in complex information, was "too sterile" and "does not keep my interest."
What our CEOs had to say: They applauded its many links and other resources, but craved a more inviting format. "It's very vanilla," said one panelist.
What you ought to know: Affiliated sites furnish many kinds of Ernst & Young tax help. One example is www.ey.com, a site well known for financial counseling for individuals and families.
What it's good for: A joyful and occasionally informative romp through the tax world for inexperienced businesspeople. This site's "personal commentary and humor make it unintimidating," said one CEO. Another recommended it only for tax filers with rudimentary questions.
Don't waste your time if: You're looking for a highly professional format or need more than a casual presentation of everyday tax issues.
What our CEOs had to say: This is a site "more geared toward the consumer than toward businesses," said one CEO. Another echoed the assessment, saying, "It just doesn't have the kind of information I need" as a business owner. However, a third CEO said that this is a "great site with good information."
What you ought to know: The site's founder, Eva Rosenberg, holds the Enrolled Agent credential, which the U.S. Treasury Department issues to qualified accountants. Rosenberg claims to respond to every E-mail query she receives.
What it's good for: Basic facts. The site's a good do-it-yourself reference for those who are just starting a business and can't afford an accountant. "If you know what you're looking for," one CEO said, "you can do full-text searches of a large tax-law database," which will give you a heap of hits to sift through. You just need to have the time to do it.
Don't waste your time if: You want quick answers to your questions.
What our CEOs had to say: It's better to leave to an accountant the kind of time-consuming tax research that's available on the site. "I don't have the time to just browse," one CEO said, and "it's cheaper for me to call my accountant for a quick answer." But for those with the stomach for truly in-depth tax research or an education in tax law, the site may be useful, according to another reviewer.
What you ought to know: In the spirit of fulfilling Robert Sommers's mission of educating its users about everything to do with taxes, the site posts advisories about tax scams on an online bulletin board.
The bottom line
For overall tax advice that's accessible and relevant to small businesses, our CEOs favored the IRS site, Dtonline .com, and Bankrate.com. The reviewers singled out Bankrate.com for its supe- rior ease of navigation, and they appreciated TaxProphet.com's extensive tax- research database. They lauded Smbiz.com for links to other tax-related sites. The panelists scorned TaxMama.com in many respects yet couldn't help liking it for its sheer fun.
Sara Trainor Callard is a freelance writer based in Quincy, Mass.
The savvy entrepreneur's guide to online tax advice
|Would CEOs go back?||What are the site's pluses?||CEOs' quick take|
|www.bankrate.com||Yes.||"The news section, which seems to be updated often."||"This is a worthwhile site to visit."|
|www.dtonline.com||Maybe.||"Clear and concise language."||"Very informative."|
|Maybe.||"Quick and easy to explore."||"Would recommend for tax issues relating to start-ups and small businesses."|
|www.smbiz.com||Probably not.||"The links."||"Could use a redesign."|
|www.taxcast.com||No.||"A comprehensive listing of links."||"It was loaded with information but was a little overwhelming for the tax novice."|
|www.taxmama.com||No.||"Good basic information that's well categorized."||The site can give you the basics for "general tax queries."|
|www.taxprophet.com||Maybe.||"Searches of a large tax-law database."||For extensive tax research without a CPA's services, this is a "good reference."|
|Ease of navigation||Variety||User-
|Technical reliability||Average grade|
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