For millions of small business owners, freelancers, consultants and other self-employed folks, April 15th isn’t the last “Tax Day” to worry about. For business owners subject to estimated taxes, tax payments are due four times each year, on April 15th, June 15th, September 15th and January 15th. These payments are called “estimated tax payments” and are meant to approximate one quarter of your … [Read more...]
1099s Are Due January 31st! Have You Tried E-filing Yet?
I have been sending out more and more 1099s each year for my clients and the process is never fun. Each year I receive questions about the best software for do-it-yourself 1099 filers. This year, I have a couple new suggestions: First off, if you aren't using your QuickBooks or QuickBooks Online to track your 1099 vendors, you really should. This functionality is built right into QuickBooks … [Read more...]
More Sole Proprietor Audits Coming
According to a recent report by the IRS, auditors are going to be stepping up their audits of sole proprietors, looking for unreported income and unfiled tax returns. In addition to searching for unreported income, the IRS will be looking for sole proprietors who did not file required employment tax returns or information returns. How to prepare your business in case the IRS comes knocking? It … [Read more...]
What's Your Audit Risk?
The IRS just published their IRS Enforcement and Service Results for their fiscal year 2009. Based upon this new data, the higher your income, the more likely that you'll receive a letter from the IRS asking for additional information or tax payments. A correspondence audit of this kind is often triggered when you forget to report all of your 1099 payments, including "freelance" payments that … [Read more...]
Sole-Proprietor Losses to be Limited?
According to a new report by the Government Accountability Office, about 25% of all sole proprietors reported losses in 2006. Most of these business owners used their self-employment loss to offset other taxable income, leading to a significant loss of tax revenue for Uncle Sam. According to the IRS, approximately 70 percent of those losses were at least partially a result of taxpayers … [Read more...]