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Taxes Information |
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Are You Overpaying Taxes If You Use Tax Preparation Software?
For many business owners the answer to this quandary is tax preparation software. Fill out a fairly simple interview, click "print" and out comes a completed return that will pass muster with the IRS. The answer to all your problems?or is it? Can One Software Program Cover All Businesses? Take a moment to consider the wide range of businesses that exist in the United States. Now cut that number down to those that can be categorized as "Internet businesses". If you were asked to write a business plan to provide web design services to each of these services, how long would it be? It would be huge and completely useless because each business would have different needs. A Internet business selling flowers would have completely different needs from an online bank which would have different needs from a hosting company and so on. The only way you could create a practical plan for all Internet businesses would be to offer a collection of general services they could all use on their sites. Tax preparation software designers have the same problem. There are over 15,000 pages in the tax code and over 100,000 pages of regulations interpreting those pages. Changes are made to the tax code ever year, and new regulations are issued constantly. If one were to create a list of questions for every tax deduction and credit detailed in those pages, the list of questions would be the size of a phone book! Yet, tax software programmers have somehow boiled it all down to a simple 30-minute interview process? Common sense should tell you that doesn't make sense. As practical matter, tax software programs are designed to make sure that you claim a general set of deductions that are applicable to businesses across all industries. Most programs try to mask this fact by asking you to identify your business before proceeding. For a lark, you might try selecting another industry and then running through the interview process. You will find that the interview process is modified a bit, but you are still being asked the same basic tax deduction questions. If you are only claiming general business tax deductions, you are paying more than you should in taxes. Ask yourself if you have seen any of the following questions in a tax software program interview: Q. Do you store business inventory in your house? Hint: You may be able to claim hundreds or thousands of dollars in deductions. Q. Did you start a pension plan for your employees? Hint: You may be able to claim a tax credit for the next three years totaling $1,500. Q. Do you have a home-based business and a second office? Hint: You may be able to deduct your commuting expenses each day. Yes, commuting expenses. Q. Do you have business meetings at your home? Hint: Did you charge your business for the space? Q. Should you claim the standard mileage rate for your auto or the actual costs? Hint: The standard mileage rate may not the best option. Q. Did you modify your business location to comply with the Americans with Disabilities Act? Hint: You may be able to claim a tax credit AND tax deduction for tax savings of $20,000 or more. Q. Did you refinance your home? Hint: The points you paid on your original mortgage are fully deductible now, not over the length of the loan. This represents only the tip of the iceberg of available credits and deductions available to you. Just one of these deductions could save you thousands of dollars in taxes. Yet, you are never going to see these questions raised in a tax software program interview. The tax code and regulations are simply too large to be incorporated into a usable software program. Your business is unique. You face and overcome issues and problems that are unique to your size, financial situation and particular business needs. Don't short change yourself by limiting your deductions by using tax software programs. Richard Chapo is CEO of http://www.businesstaxrecovery.com - Obtaining tax refunds for small businesses by finding overlooked tax deductions and credits through a free tax return review.
MORE RESOURCES: Those who oppose higher taxes and are fed up with record levels of U.S. debt may pine for Ronald Reagan, the patron saint of lower taxes and smaller government. WASHINGTON — Raising taxes on the wealthiest Americans, as President Barack Obama proposes to do, probably wouldn't wreck the moribund U.S. economy, but extending the tax cuts they've enjoyed since 2001 could spur some economic benefit. Burnsville council approves 5.6 percent maximum hike after austerity measures in 2010 by John Gessner Thisweek Newspapers In stark contrast with this year’s austerity measures, Burnsville will raise 2011 city taxes by up to 5.6 percent and avoid deep budget cuts next year. The City Council voted 3-2 on Sept. 7 to certify a maximum levy increase of 5.6 [...] Taxes headed back up in 2011 is a post ... Jupiter holds taxes steady, eliminates 8 jobs from budget Property taxes will stay the same for Abilene residents. So many different taxes, and they all keep going up, Gettysburg resident Ken Groff said, shaking his head. Two primary contests for Johnston council and three for School Committee are at stake Sales tax collections – a major source of funding for local governments – are holding strong in Andalusia and the county, the most recent numbers show. The figures, which represent taxes collected in July and remitted in August, are the most recent available. Andalusia showed an approximately 2 percent increase to $364,912, city officials said Thursday. Year-to-date, [...] Capitol Hill employees owed $9.3 million in overdue taxes at the end of last year, a sliver of the $1 billion owed by federal workers nationwide but one with potential political ramifications for members of Congress. United States - Washington DC - Back taxes - Capitol Hill - Neighborhoods Taxes go downSeveral letters have complained about property tax increases. However, we are having the opposite experience: Our home's assessed value decreased by about 30 percent, and our taxes will come down almost 20 percent if no budget change is adopted, and 30 percent if the proposed change is adopted. |
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