When it comes to preparing the tax return for your business, you may want to choose a professional to help you. Here are some tips. Go to the Directory of Federal Tax Return Preparers on www.IRS.gov to start your search on the preparer’s qualifications. Avoid businesses which delegate the work to someone with less experience or knowledge. Also ask questions and get references from clients, friends, or coworkers who have used the tax professional before. Find out if they were satisfied with the services received.
Choosing a Small Business Tax Return Preparer
Select a preparer who will be available to assist you in the future, in case you receive a correspondence from the IRS or your return is selected for audit. Check if your preparer is affiliated with a professional organization and if that organization provides or requires their members to acquire continuing education and adhere to a code of ethics. Keep in mind that an unenrolled preparer may be affiliated with a professional organization. Check if the preparer has a mandatory IRS issued identification number, called a PTIN. Find out your preparer’s history with the Better Business Bureau and State Agency for Certified Public Accountants and the state’s Attorney General’s Office.
Other Choosing a Business Tax Preparer Tips
Other tips are to avoid preparers who guarantee they can obtain a larger refund than other preparers. Beware of a preparer who guarantees results or who bases his fees on a percentage of the amount of the refund. And remember, a practitioner may not charge a contingent fee – percentage of your refund – for preparing an original tax return. The law requires a paid preparer to sign the return and complete the information in the space provided for paid preparers. In addition, the preparer is required to give you a copy of the return and keep a copy of the return or list with your name and SSN for three years. It does not matter who prepares the return. The taxpayer is ultimately responsible for the information reported on the return and, if not accurate, would pay any additional taxes and interest and may be subject to penalties. So double-check every single line before submitting your return, especially if you’re a do-it-yourselfer. Be sure all your income is reported, including income for which you did not receive any statements, such as interest income and cash payments.
Signing a Tax Return Prepared by a CPA
Also, never sign a blank return or sign it in pencil. Watch for common mistakes, such as incorrect or missing Social Security numbers, incorrect tax entered based on taxable income and filing status. Computation errors in figuring the taxable income, withholding and estimated tax payment and credits you claim, withholding and estimated tax payments are entered on the wrong line and math errors. Most electronic software programs will help you avoid this. It is important that you review your entire return because any errors may delay the processing of your return. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it. Speaking of that, don’t forget to sign the return. Believe it or not, that’s another very common mistake.
Using IRS eFile to Submit Business Tax Return
When you are ready to file your return, consider IRS eFile, which will help you cut back on math errors that may cause you trouble. Best of all, you’ll get your refund faster with direct deposit. If you owe tax, you can file early and delay paying with several ePay options, including credit cards. If you are paying someone to prepare to file your return, make sure they offer IRS eFile. Any paid preparer who prepares and files more than 10 returns for clients must file the returns electronically unless the client opts to file a paper return. IRS has safely and securely processed more than one billion individual tax returns since the debut of electronic filing in 1990.
Using the Electronic Federal Tax Payment System (EFTPS)
For making your tax payments, use the Electronic Federal Tax Payment System. EFTPS is the secure, accurate, easy-to-use way to make Federal tax payments of any kind and provides an immediate confirmation for each transaction. The service is offered free of charge and enables employers to make and verify Federal tax payments 24 hours a day, 7 days a week, through the Internet or by phone. For more information, employers can individually enroll online at www.EFTPS.gov; or call EFTPS Customer Service at 800-555-4477 for an enrollment form. Staying knowledgeable about taxes is a vital part of your business and one way to avoid tax trouble. IRS has many ways to help you. Check out our website at www.IRS.gov. It has a comprehensive list of helpful publications and other small business tools on the Small Business and Self-Employed Center webpage. Or, if you are just starting a business, a good place to begin is the Starting a Business page on www.IRS.gov.
Other IRS Tools and Resources for Small Business Owners
Some of the tools and resources available to you are listed here. They are designed to help you learn more about business taxes on your own time and at your own pace. We’ll go over some of the more popular ones now. First, the Tax Calendar allows you to view tax payment and other due dates and actions for each month. You can see all events or filter them by monthly depositor, semiweekly depositor, excise, or general event types. You can even have these calendar reminders sent directly to your e-mail box or automatically update to your computer desktop. In addition, the Small Business Self-Employed Tax Center on www.IRS.gov is a one-stop taxpayer resource.
There you will find information on taxes, recordkeeping, accounting practices, completing Federal business and employment tax returns, and meeting other Federal obligations. IRS also offers 30 electronic new subscriptions, delivering Federal tax news and information directly to your e-mail box. eNews for small businesses provides important incoming tax dates for SBSE customers; what’s new for small businesses on the IRS website; reminders and tips to assist Small Business Self-Employed with tax compliance; IRS news releases and special IRS announcements that pertain to SBSE customers; and tax-related information from other Federal agencies.