Tax Time Survival: Protect Your Small Business from Tax Refund Fraud

Tax Time Survival: Protect Your Small Business From Tax Refund Fraud

For this installment of our Tax Time Survival series brought to you by PowerSites, we’re going to give you tips on protecting yourself and your small business from tax refund fraud.


Tax Time Survival: Protect Your Small Business from Tax Refund FraudDon’t put off filing your taxes for too long. According to an annual report, recently released by the FTC’s Sentinel Network, about 160,000 tax identity theft complaints were reported to the FTC in 2012, says Forbes.com‘s staff writer, Janet Novak. The most common way a person can commit identity theft-related tax fraud is by stealing a taxpayer’s social security number and filing under his name. If someone else gets your refund before you file, that will hold up your ability to file and receive a refund.

While it might seem as if you are powerless to the ill effects of this awful crime, Sheryl Harris of the Plain Dealer online journal on Cleveland.com says that there are several steps that you can take to protect yourself and your family from becoming a victim of identity theft.

Protect Your Identity

You do have a choice and you can protect your family and your finances from being used in a fraudulent manner. There are identity protection solutions out there that you can try out to experience their effectiveness. You can sign up for a 30-day free trial of the Life Lock protection service and see what it’s like to have a company check on your credit, bank records and other financial aspects of your life that need to be kept safe.

Phishing for Refunds

Novak says that many taxpayers have been receiving fake emails that say they are from the IRS, and that recipients should not respond to these emails, but report them to the IRS immediately. How can you know for sure that an email is not from the IRS? Novak says that the IRS only contacts filers by regular mail. Harris also says that if a social media site contacts you and says that they need information from you, regarding an audit or return, that is definitely a phishy situation that indicates an attempt at committing fraud.

Create Impenetrable Passwords

If you’re filing for a refund online, Use a strong password to secure all of your sensitive data and be careful about who you share it with. Be sure that the password is a combination of upper and lowercase letters, numbers, symbols and characters. Keep a safe record of your passwords in an easy to access app, like Lock ‘Em password manager.

Erase Records

If you keep spreadsheets or QuickBooks records, clear all of the tax data from your hard drive after you file and save the data onto an external hard drive or thumb drive. Harris says that after you are finished with filing, make sure that you keep the external drive in a protected place.

If you have any concerns or would like to know ahead of time if someone has already filed under your name, contact the IRS and give them your social security number and any other information they need to verify that you are who you say you are. Remember, if you are the one who is calling, you don’t have to worry about giving your sensitive information. It’s when someone calls you and asks for your sensitive data, that you should hang up.

Tax Time Survival: The IRS Small Business Center has all the resources you need.

Tax Time Survival: IRS Small Business Tax Center is a Convenient Tool for Tax Management

Tax Time Survival: The IRS Small Business Center has all the resources you need.Small business owners have enough to remember without trying to keep critical tax dates top of mind, so the IRS thoughtfully publishes a small business tax calendar with all the important dates marked. This versatile tool is available in English and Spanish, and it comes in multiple formats so you can select the one that works best for you. In this installment of the Tax Time Survival Series by PowerSites, you’ll find information about useful resources for tax management offered in the IRS Small Business Tax Center.

The IRS Tax Calendar

The continuously updated calendar is available online, which is helpful if you’re on the road or you use multiple devices, or you can download it as a desktop application. For the lucky people who request a copy before they run out, there is a hard copy version that is available on a first-come, first served basis. If you use Microsoft Outlook, the ultimate convenience is the version that plugs into your Outlook calendar and automatically adds reminders of important dates.

The tax calendar has filters that let you see specific deadlines that matter to you based on whether you make deposits monthly or bi-weekly, or whether you want to see just excise taxes on vehicles or equipment. You can see the important dates for the current year, or a prior or future year to make reporting and planning simple, and you can print the calendar if you like to work with hard copy. The online version has extensive help in case you are stuck. All of the electronic versions of the calendar automatically update with new information as regulations change.

Along with the calendar, the IRS offers other resources to help you prepare and get through tax season.

IRS Small Business Tax Center Resources

  • One resource is an on demand self-paced virtual workshop covering important tax regulations that affect small businesses. This workshop will help you to understand your tax obligations so you can avoid fines and penalties. Knowing what the regulations are helps you to understand the reminders on your calendar. The virtual workshop is free and can prove very valuable, so you might want to take the time to go through it even if you have access to professional financial management.
  • The IRS also has a video portal with easy to understand short videos to help answer tax questions for small businesses. This site includes webinars, audio conferences and other presentations on many topics specifically geared to individuals or small businesses. The search capability helps you find the answer to exactly the question you need answered, but even if you don’t have a specific question these videos are valuable and informative about business issues and tax laws.
  • Another important, and useful resource is the IRS Small Business Tax Center. It includes links to easy-to-understand explanations about tax regulations as well as all necessary tax forms. It also includes useful information on determining whether a person is an employee or a contractor, links to employer identification number requests, health care information, tips for setting up a retirement plan and helpful articles on starting, running or closing a business and the tax ramifications of each. In addition, the IRS also publishes a free newsletter, and you can subscribe from a link right on the Small Business Tax Center page.

Whether you’re a free-lancer or you have employees working for your company, the IRS Small Business Tax Calendar and other IRS tools offer important information and reminders so you never miss a date, and can survive tax season without getting too overwhelmed.

Small Business Owners on a Budget

Tax Time Survival: Finding the Right CPA for Your Small Business

While some business owners prefer to take on the daunting task of filing their own taxes, some small business owners will find that they need the services of a certified public accountant (CPA). Small businesses may only call upon a CPA to prepare their taxes, but a CPA can do much more, by reducing your risk of financial errors and help your company build its value and your wealth. To aid in your search of finding the right CPA for your small business, PowerSites has put together an outline of things to do to find a CPA that’s a perfect match to the needs of your business.

What Your Business Needs

Tax Tips: How to find the Right CPA for Your Small Business NeedsSome businesses seek out experienced financial advisors that will review their business books every month while other businesses only need an accountant to complete year-end financials and tax returns. Just like doctors, certified public accountants also specialize in specific areas. Some specialize in specific industries, while others may specialize based on business size. You also have to consider whether you want your bookkeeping done in-house, or remotely. There are other variables to consider as well, such as whether or not you want your accounting firm to also provide consulting services. It’s a good idea for you to create a list of what you seek in an accounting firm, so that when you begin screening candidate accounting firms you can just check off each item on your list that matches. This will help you keep track of what you liked about each accounting firm, and help you to make a knowledgeable decision at the end of your interviews.

Ask for Referrals

To make your search easier, ask professional associates that you know and trust if they can recommend an accounting firm to you. It is likely that they will have someone to recommend. Sure, you can do an Internet search, but personal recommendations are usually a more reliable method of inviting a firm to sit down for and tell you why you should give them your business.

Search Extensively

Certainly, a referral from someone you know will carry a lot of weight— but if you do not interview several accounting firms, you have not done your due diligence. The greatest accountant on earth does you no good unless you and the CPA can communicate. During your search, ascertain the candidate firm’s billing practices. If they charge you for five-minute phone conversation, you may not make that call and a poor decision might result. Ask the company how many small businesses like yours are clients and then ask for names to call as references.

Check References

No matter how you find the accounting firm you want to hire always check the references you have been given. Ask your peers how much they value the advice given to them by the CPA, how good is the firm about returning phone calls. Ask them to brief you on the firm/CPA’s weaknesses as well as strengths.

Check the AICPA Website

If you’re looking for a CPA with a specialized skill-set and credentials, the American Institute of Certified Public Accountants allows you to search a database of CPA’s, so you can find one with the required skills that you’re looking for.

Tax Time Survival: Online Tax Tools from IRS.gov for Small Business Owners

Tax Time Survival: Online Tax Tools from IRS.gov for Small Business Owners

Doing taxes is tough for anyone, be it an individual or a major corporation. This is why personal and small armies of accountants are employed en masse every year, to figure out the complexities of the tax code. For a small business owner, who are spread thinner then anyone out there, hiring an expensive accounting firm or even an individual accountant may not be in the budget. In these cases, small businesses will have to do their taxes themselves, with a number of helpful forms and programs provided by the internal revenue service. PowerSites wants to help ease the burden of tax time, so we’ve compiled some of the most helpful forms and programs offered by the IRS, and listed them below.

Tax Time Survival: Online Tax Tools from IRS.gov for Small Business Owners

IRS Virtual Tax Workshop for New and Small Businesses

The IRS Virtual Small Business Tax Workshop is an interactive online tax forum that provides new and small business owners a place where they can always ask questions, download forms and get advice from those who work for the IRS directly. Consider it a help desk whenever you need it so that if you run into any problems while doing your taxes and need help from the people who wrote the actual code, you will be able to easily ask them.

IRS Video Portal

At the IRS Video Portal, you will find a number of videos and webinars discussing a wide variety of tax topics. Not only will these instructional videos help you to do your taxes, but it will also give some great tips and strategies for keeping your taxes in order in the future. The small business section is also a great resource, especially if you are an employer.

IRS Retirement Plans Navigator

If you are thinking about retiring soon or even in a few decades, the IRS Retirement Plans Navigator will help you to strategize and plan ways to save money for this time. It is also a critical resource for small businesses who are offering retirement plans for their employees. This site will literally walk users through each plan that is out there and show them the ins and outs of it and what is required of the business and individual, in the simplest of terms.

IRS Small Business Tax Calendar

The IRS Small Business Tax Calendar is a regularly updated tax calendar, that reflects the ever changing tax code landscape, making it ideal for small businesses and freelancers to use when they are trying to do their taxes on their own. It is available online or as a print-out that can be hung on the wall for reference. There are also a wide variety of different tax and business tips offered by the tax calendar every year, based on new tax codes that may have been implemented.

Small Business and Tax Employment Center

In order to use everything that is outlined above, you must visit the IRS Small Business and Self-Employed Tax Center online. Go there, and sign up so you can receive their regular email newsletter to stay on top of any new announcements, or features that they create in the future.

Remember to use these free online tools, and it’ll help to make tax time that much easier!

Changes to the American Taxpayer Relief Act, and it’s Impact on Small Business Owners

Changes to the Taxpayer Relief ActSmall businesses need to be aware of every tax change that applies to them for several reasons. You want to keep up-to-date on the latest tax regulations so that your tax filings are accurate, and you don’t want to miss out on any deductions that you can take advantage of. One of the latest changes to the tax law, the American Taxpayer Relief Act, has some areas that are quite relevant to small business owners.

  • This act has business tax extensions that may prove helpful to small businesses. Several extensions and tax credits include expensing mine equipment, extension of the work opportunity tax credit, exclusion of 100% gain on small business stock, empowerment zone tax incentives, new markets tax credit, bonus depreciation, and research credit.
  • While extensions to these tax credits are great for small businesses that they apply to, you may end up paying more in taxes overall depending on your personal income. If you make more than $225,000 as a filing jointly married couple, $400,00 single filer, $425,000 head of household, or $450,000 joint filer, you pay 39.6% in taxes.
  • Another change to personal taxes involves capital gains, along with dividend earnings. If you get a profit from selling your business, you’ll be paying 20% if your income is over $400,000 as an individual or $450,000 for married couples. Estate and gift tax changes may concern you if you’re running a small business with your family. The rates for these have been changed to 40%, if the value is over five million dollars.
  • You may be claiming less personal exemptions this year as well, if you earn over $300,000 for joint filers, $250,000 for single filters, $275,000 for head of household, or $150,000 for married filing separately. Every $2,500 above this income limit reduces your allowable exemption by 2%. This change also affects itemized deductions by 3%, if you itemize instead. If you were subject to the Alternative Minimum Tax before, the exemption rate for these were increased to $39,375 for married filing separately, $50,600 for single, and $78,750 for joint filers.

The credits extended under the Relief Act can lead to more money for your small business cash flow, which is always good news. Of course, if you’re bringing home a personal income higher than the limits covered in the Act, you’re going to be feeling it in your pocketbook. You want to ensure that your small business gets a chance to use its profits for reinvestment.

The highest earners are the ones hardest hit, but everyone below that threshold will see their tax bills much lower this season. Given the slow recovery of the economy, this is welcome news for any business that’s been struggling. The extra money comes in handy for business expansion, equipment purchase or renting, employee hiring, and improvement of existing sites. Don’t forget about all of these tax credits that you can take when you file your business taxes this year. You don’t want to miss out on any reduction in your tax bill.

If you would like to read the act in it’s entirety, it can be found here.

The 10 Best Tax Resources for Your Small Business

With the new year fast approaching, that means the inevitable tax time is not too far behind. There is no way for a small business to escape tax time, but while it can be a headache, there are ways to make preparing and submitting your taxes a bit easier.

Best tax resources for a small business

Turbo Tax

Whereas TurboTax is a common tool used by individuals filing personal tax returns, it can also be used for a small business. Turbo Tax from Intuit offers software that will guide a small business owner through the entire filing process. This software ensures that you take advantage of every write-off and business deduction.

The IRS website for Small Businesses

This is most likely the best tax resource available on the internet. At the IRS website, you will find:

  • Numerous articles and information related to tax preparation and deductions;
  • Links to tax forms;
  • Frequently asked questions (FAQs); and
  • Free electronic filing options for various types of small businesses.

About.com for Business Taxes

This is not a community forum; this site compiles useful information for the small business owner. You can find information about:

  • Ways to keep your small business from being audited;
  • How to reduce your tax burden; and
  • The top tax deductions for small businesses.

The Best Tax Resources for Small Business Owners

The Wall Street Journal’s SmartMoney Tax Blog

This blog offers articles that discuss the most recent tax-related news for small business owners, investors and families.

QuickBooks Online

QuickBooks online makes keeping track of your expenditures and profits simple. According to Brandy Orrange, who is an independent business consultant, once you enter your basic information, this program provides you with optimal organization. Various packages are available to meet the specific needs of any business.

Shoeboxed

This service is designed to eliminate your need to keep your paper receipts. You can use this service in one of three ways:

  • You can mail your receipts in and the company will scan them and enter all the information for you.
  • You can scan receipts and then upload them into your Shoeboxed account.
  • You can take pictures of your receipts using a digital camera.

While online, you can also:

  • Create charts and graphs.
  • Organize your receipts.
  • Export your data to PDF, Excel or Quicken.

In addition, Shoeboxed offers an iPhone app with a free trial. If you like the program, you may want to consider exploring their monthly and yearly plans.

Tax Act Business

Tax Act offers both state and federal editions for the business tax forms 1120, 1120S and 1065. The editions available are inexpensive and allow you to e-file your return. The state editions cost $14.95, whereas the federal editions range from $39.95 to $54.95.

Taxsites.com

This is another all-inclusive directory of resources for tax-related issues. The topics on this site are organized by category offering numerous useful links. This site also includes a comprehensive directory of links to state tax laws and state tax agencies.

TaxProfBlog

This site is part of the Law Professor Blogs Network and offers thorough, reliable and up-to-date information concerning small business and tax news.

NeatReceipts

As every small business owner knows, keeping track of your receipts every year is a daunting task. Now, with NeatReceipts you can eliminate excess paperwork by simply scanning your receipts into your computer. This portable scanner costs under $200 and you can export your data to PDF, TurboTax, Excel, QuickBooks and Quicken.