The National Association for the Self-Employed advised small business owners who have put off doing their tax returns not to panic.
"As long as you have all of your paperwork gathered in one place before starting and take the time to check your math, you'll likely have no problem getting your return filed by April 18th," said NASE national tax advisor Keith Hall in a statement. "If you don't think you'll make it in time, you can get an automatic six-month extension by filing Form 4868 and pay the tax you think is owed by April 18th."
Hall offers these last-minute tax tips for small business owners who are starting to sweat:
• Check for hidden deductions: If you work out of your home, your office may qualify for a deduction. Do you drive to the post office or a client site? Those miles may add up to a sizable deduction too.
• Retirement savings: Retirement savings, such as SEP contributions and IRA deposits, are deductible for last year's tax return up until April 18, 2011. That means you can count money deposited into these accounts, up until the day you file your 2010 tax return. In the case of SEP contributions, those can even be made up until an extended due date, as late as October 15th.
• Filing date: If, despite all your rushing around, you still can't make the April deadline, relax. All tax filers can get an automatic 6-month extension by filing Form 4868 by April 18th, which you can download from the IRS Web site at http://www.irs.gov/. However, an extension of time to file is not an extension to pay. If you do not send the IRS what you think you owe, you'll be stuck with late fees and interest.
• Proofread the form: Most of the mistakes on tax returns are simple addition and subtraction errors. Check your math. Then, check your math again.
• Start thinking about next year: While micro-business owners may be tempted to finish their return and not think about taxes again until next year, now is a great time to reflect on how to reduce your 2011 tax liability. Consider deductions for a home office or employing your children; create a health reimbursement arrangement, which would enable the business to reimburse bona fide employees for all out of pocket medical expenses; reconsider the tax implications of incorporating your business; and research retirement plans designed specifically for the self-employed, including an IRA, SIMPLE, SEP, Single 401(k), and Keogh plan.
• Look for help: Sole proprietors doing their own taxes can find help from a number of sources, including the NASE's Tax Resource Center, where small-business owners can ask the NASE's CPAs and tax professionals a question and hear back within a few business days. The IRS also offers a toll-free help line, 1-(800)-829-1040, for tax questions.
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