Nothing strikes terror in the heart of the small biz owner quite like finding a letter in the mailbox from the IRS! In an effort to help you avoid that unpleasant scenario, here are some common pitfalls to avoid if you don’t want the IRS as your new pen pal!
- Include all your income on your tax return! If you received a Form 1099-MISC from anyone, be sure this income is on the return, in the right place, or you will receive a notice. Even if you did not receive a 1099 for work you did, you are required to report the income. The IRS receives copies of 1099s from the payers and these are checked against the income you report.
- If you made quarterly estimated tax payments, double-check the amount and the dates the taxes were paid. Forgetting to include a payment is common, especially the payment made in January for the fourth quarter. Remember the first payment of the year is sent in April, followed by June and September payments and concluding with the January payment for the fourth quarter of the preceding year.
- If you underestimated the amount of your taxes and are unable to pay the full amount, be sure to file the return on time anyway. You can request to pay the remainder in 120 days or with an installment agreement.
A few minutes of extra time reviewing your return will pay off in peace of mind and help you stay off the IRS radar screen!
Deb Howard Greenleaf, EA, CEO and Principal, of Greenleaf Accounting Services provides virtual accounting and bookkeeping services and specializes in financial management to consultants, coaches, solo professionals, and other small business owners across the US. Deb is an Enrolled Agent (EA)—an IRS-licensed tax professional—and specializes in small businesses and entrepreneurs filing Schedule C or as an LLC. As an Advanced Certified QuickBooks ProAdvisor, Deb spends her day in QuickBooks Online and specializes in providing QBO support.
