Tax Matters - The Top Tax Defenders Blog

When you operate a nonprofit business, you enjoy tax protections that are not available to for-profit business owners. While these tax breaks allow you to serve the community and provide services that help those in need, you still have the obligation to deduct and remit payroll taxes to the government. In fact, if you fail to meet this obligation, the IRS could levy significant penalties and punishments against everyone involved in the day-to-day financial operations of your company. Rather than allow your board, managers and even your volunteers be targeted in such a way, you can use these strategies to protect your staff and avoid owing the IRS delinquent payroll taxes.

When you take into consideration the relatively small percentage of businesses audited by the IRS each year, you may think that you are particularly unlucky when the IRS singles out your small business for this purpose. While going through an audit understandably can be nerve wracking and downright inconvenient, you still have a number of resources available to you to make this process smoother and less worrisome. If or when the IRS zeroes in your small business returns, you can use these strategies to beat an audit.

You may pride yourself on being able to run a small business that provides quality services and products. For all of your success, however, you may be unaware that your tax returns could prompt the IRS to audit your company. In fact, many small business owners like you want to do everything in their power to avoid being audited. You can lower your own risk and continue to enjoy all of the success of running your own business by understanding some of the primary details that the IRS looks for when choosing whom to audit each year.

When much of your livelihood is wrapped up in your small business, you may dread ever being contacted by the IRS about missing returns or a tax debt. Nonetheless, the IRS will contact your business if you do in fact owe the government money. Your first instinct may be to ignore these communication attempts in a bid to protect your business. However, doing so only will make the matter worse and even put you in a more suspicious light. Rather than draw the ire of this agency, you can remain proactive and use these strategies to resolve your tax delinquency.

With tax laws continuously changing, business owners may find it difficult to know what expenses they can claim at the end of the year. Even more, they may not remember what funds they are supposed to claim to avoid incurring penalties and fines. One of the most confusing aspects of filing taxes as a small business owner involves knowing whether or not to claim bonuses as a business expense. They can appreciate why it may be necessary for them to declare the bonuses they pay to employees and what qualifications call for them to include these funds on their returns. 

Getting laid off from your job can be an extremely difficult thing to deal with. But finding out that you may have to deal with an unexpected tax bill can make it worse. Here are a few pointers about layoffs and taxes you'll want to keep in mind as you manage your time between jobs. 

Do you own a rental property? Are you currently leasing or looking to lease it to someone? If so, you may be eligible for certain tax deductions based on the expenses you incur during the course of your rental business. However, you'll need to acquaint yourself with several provisions in the IRS tax code to make sure that you claim your expenses correctly, document them properly, and adjust them as necessary.

If you own a business and you have employees, then you are no doubt familiar with the requirement to withhold payroll taxes and submit them to the IRS. According to federal tax regulations, employers are required to deposit their employees' payroll tax withholding amounts, as well as their matching deposits, once every three months. For bosses who neglect or refuse to comply with this payroll tax requirement, the IRS has instituted a penalty called the Trust Fund Recovery Penalty (TFRP). 

Some taxpayers may think that they can simply close a business without having to take any additional steps relating to IRS regulations. While it is completely up to each business owner to decide when to close up shop, there are a few procedures they must follow to make sure that they inform the IRS of their plans and that they issue the appropriate forms to any employees. 

Employment taxes vary widely, depending on the withholding allowances and filing statuses employees claim. They may also vary, according to the state and city in which the employer and worker reside. Employers must remit the withheld income and FICA taxes to the government every quarter. They must also send in their share of FUTA and SUTA taxes. Self-employed individuals, though, are responsible for remitting their taxes themselves, since self-employeed taxpayers have no employers.