Navigating red-flags, red-herrings and the temptation to take the easy route;
IRS allows a few extra days this year
DALLAS, TX – With just a week until the April 18th tax filing deadline, the National Association for the Self-Employed (NASE), the nation’s leading advocate and resource for the self-employed and micro-businesses, today released a list of 9 top helpful tax tips for filing beneficial and accurate tax returns.
Keith Hall, President and CEO of NASE – and an accountant himself – counts down the 9 top tax tips leading up to this year’s tax filing deadline:
#1… Don’t Take the Easy Route
Whether you will do the return yourself or hire a professional to help, make sure you avoid the temptation to take the easy route. Don’t just guess on business miles, or travel expenses.
Take the time to check your records, update your mileage log, do your due diligence. If a question ever comes up it won’t be tomorrow but several years from now and you won’t remember where you got that number. So avoid short cuts, do your homework in gathering your little stack of paper and you will be glad you did.
#2… Stay Connected
As a small business owner it is easy to feel like you are out there all alone. If you have an Internet connection, you have resources. Bookmark the IRS website at IRS.gov. Bookmark the website for the National Association for the Self Employed at NASE.org. Take some time to ask questions, search the site and review potential deductions that you may have missed. Stay connected and remember that you are NOT alone.
#3… Look for Hidden Deductions
Most deductions come straight from your business checkbook. But some items like the business use of your personal vehicle, the business use of a space in your home as a home office are easily forgotten because they don’t show up as a cash disbursement. In addition, many small business owners forget about the options for a deductible retirement plan contribution. Make sure you don’t miss these deductions in calculating the net income from your small business.
#4… Think Outside The Box
Have you thought about creative ways you can reduce the tax you pay? Or some helpful advice on filing out your return? The NASE Minute has a number of helpful online short videos that can help you think outside the box, including Hire Your Kid, Preparing an Audit Proof Return, Missing Deductions, and Deducting Health Care Premiums. In just a few minutes, you can learn of a new way to file your return and/or save a few dollars.
#5… “Red Flag”, Red Herring
Make sure that you are extremely diligent in taking advantage of every single legitimate deduction to which you are entitled. Do not avoid a deduction because you “heard” it was a red flag. Foregoing a deductible item that you are entitled to is like paying the IRS part of your hard earned money in exchange for reducing your chances of audit from about .0087 to .0086. Do your homework, document your deductions and DO NOT give the IRS any more money than you absolutely have to.
#4… Don’t Forget About the Affordable Care Act (ACA)
Under the ACA all of us must have a qualified health plan or we must pay an extra tax on our 2015 tax return. Make sure you check the right boxes based on the choices you made during 2015 for health coverage. This is still new in its second year, so make sure you don’t forget. And look to see if you qualify for an exemption.
#3… Build a Paper Fort
Yes, we are supposed to be heading to a paperless society, but at tax time you still want to have a stack of paper. Take some time to build your own little paper fort. You should have received 1099s, W-2s, 1098s, K-1s, 1099INTs, 1099DIVs, etc. Now is the time to find all of that paper and organize, summarize, and secure it. If a question ever comes up and the IRS wants to know, most questions can be answered with a single piece of paper.
#2… Getting Close to the Filing Deadline?
Good news! Because Emancipation Day is being celebrated on Friday, April 15th, the Federal Government has extended the tax-filing deadline to Monday, April 18th this year. While April 15th is the traditional official deadline, this year you get three extra days.
#1… Still Out of Time? File an Extension!
It’s April 18th and the return is due. Still not done? You can certainly ask for more time. Request and extension using IRS form 4868 for an extra six months to complete all the forms. Remember that this is an extension of time to file NOT an extension of time to PAY. So make a quick estimate of any amount that you might owe and send a check with the extension.
Click here to view the update, changes and adjustment to the tax code this year
The National Association for the Self-Employed (NASE) is the nation’s leading resource for the self-employed and micro-businesses, bringing a broad range of benefits to help entrepreneurs succeed and to drive the continued growth of this vital segment of the American economy. The NASE Small Business Locator helps identify and connect our nation’s smallest businesses. In addition, NASE’s new health care portal helps small business owners navigate the nation’s health care marketplace. The NASE is a 501(c) (6) nonprofit organization and provides big-business advantages to hundreds of thousands of micro-businesses across the United States. For more information, visit the association’s website at NASE.org