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Event: Navigating business taxes with TurboTax

SBOCTeam — Mon, 23 Feb 2009 20:38:22 GMT

Don't know a thing about business taxes? You're covered!

A common challenge to most start-up entrepreneurs is complying with the Internal Revenue Service and ever changing regulations. Bob Meighan, Vice President of Consumer Advocacy for TurboTax can help you navigate through this dynamic world, whether you're a corporation, partnership, or multi-member LLC. He can provide extra guidance to simplify tax preparation and help you maximize tax savings.

Founded in 1983, Intuit Inc. is a leading provider of business and financial management solutions for small and mid-sized businesses; financial institutions, including banks and credit unions; consumers and accounting professionals. Its flagship products and services, including QuickBooks®, Quicken® and TurboTax® software, simplify small business management and payroll processing, personal finance, and tax preparation and filing. More information can be found at http://www.intuit.com.

Bob Meighan, Vice President of Consumer Advocacy, is the customer's voice at Intuit. As vice president for consumer advocacy in the TurboTax organization, he represents customers to ensure that new products meet their needs. He also shares the knowledge he gains from customers throughout the TurboTax development teams.

Bob joined Intuit in September 1991 and has held several positions within TurboTax. Before that, he spent 11 years at Price Waterhouse where he was a senior manager in the advanced technology group.

Ask Bob:

How do I handle major life changes?
What are some major red flags that trigger audits?
Which deductions are the most overlooked?

Post your question here today and then join us on March 31 at 2:00PM EST for Bob's response.

Re: Event Mar. 31: Navigating business taxes with TurboTax

CommunityTeam — Tue, 31 Mar 2009 18:52:29 GMT

Bob - Thanks for taking the time to share your expertise with SBOC. With tax deadlines just around the corner, we appreciate the timely tips and advice your provided to the Community.

Community - If you would like to learn more about TurboTax, please visit http://www.intuit.com/ or http://turbotax.intuit.com/

Re: Event Mar. 31: Navigating business taxes with TurboTax

bmeighan — Tue, 31 Mar 2009 18:55:34 GMT

In closing, there are two weeks left before April 15. My advise to you is as follows:

Start now. Tax filers who wait until the last minute tend to make more errors. Starting now also allows you to identify and documents you may be missing.
Go Online. I mentioned this above. It's easy and convenient, and for many filers it is free.
File Electronically. Other than the fast refund you get by efiling your return, you don't have to print, copy, sign, staples W-2s and run down to the post office. Plus, most tax software services offer free federal electronic filing. It's a great deal and will greatly reduce the frustration of mailing your return.
File an Extension. If you can't make the April 15 deadline, file an extension. The extension gives you a 6 month "grace" period in which to file your return. However, it does NOT give you an extension of time to pay. If you owe the IRS (or state), you need to pay that on or before April 15. Again, tax software will help you identify whether you have a liability and file the necessary form for the extension (Form 4868). Don't forget that you may also need to file an extension for your state. Each state has different rules so I can't generalize other than to say most states honor the IRS extension (but you'll have to pay the state if you owe them).

Good luck and I hope you get a big refund.

Re: Event Mar. 31: Navigating business taxes with TurboTax

bmeighan — Tue, 31 Mar 2009 18:46:18 GMT

franklinplace... Congrats on your first year in business! If you can make it in these challenging times, you can make it anytime. Best of luck!

First, while TurboTax will help you navigate the maze of rules and regulations, we can't help you get organized. That is something you will have to master. My tip to you is always keep your business and personal expenses separate. If you have to use a separate credit card for business purchases, I encourage you to do this. It helps at tax time.

Depending on your business structure (I assume you are a self employed small business owner... as opposed to having a corporate or partnership structure), your medical expenses will be treated as a personal expense subject to the regular rules for deducting medical expenses (subject to 7.5% of your adjusted gross income). However, there are some provisions that allow you to deduct some of these medical expenses as "an above the line deduction" (line 29 on Form 1040) for those who are self employed. This is a great way to reduce your income for an expense that generally is not deductible for many taxpayers.

Here again, TurboTax will walk you through this area to ensure you get the biggest deduction and thus the biggest refund.

Re: Event Mar. 31: Navigating business taxes with TurboTax

bmeighan — Tue, 31 Mar 2009 18:38:25 GMT

jackzee... You can deduct the depreciation on used equipment and furniture you use for your business (like a home-based one). It's no different than if you had purchased it new other than you paid less for it. Likewise, you depreciation deduction will be slightly less too than if it were new. The other thing to remember is that for many assets you have the option to write off the full amount in the first year (known as section 179 deduction).

Re: Event Mar. 31: Navigating business taxes with TurboTax

franklinplace — Tue, 31 Mar 2009 18:30:21 GMT

This is my first year in business. For personal taxes it gets confusing when it comes to deductions for medical/health expenses. Always scrambling for receipts. How does Turbo Tax help me sort this out for my business expenses paid for employee health benefits?

Re: Event Mar. 31: Navigating business taxes with TurboTax

bmeighan — Tue, 31 Mar 2009 18:33:43 GMT

The area of charitable contributions has changed significantly in the last few years because of abuse. Taxpayers were overstating the value of contributed property, inflating cash contributions, etc. So the IRS put into place strict rules governing the requirements for claiming a charitable contribution deduction.

For example, you now need receipts for everything. That may be a receipt from the recipient, a cancelled check, a sales receipt, etc. For items of clothing,furniture and other household goods, the items must be in "good" condition or
better to qualify for a deduction. If you're donating a car, not only will you need a receipt but you'll also have to find out how much the charity sold the car for to earn a deduction. And, you deduction will be for the amount for
which the car sold. When it comes to valuing items of property, I highly recommend relying upon the values published by ItsDeductible. This is included with TurboTax and provides "fair market values" of thousands of items.

ItsDeductible will provide much higher deductible valuations than those provided by Goodwill or Salvation Army because ItsDeductible uses current selling prices for
millions of auctions from the eBay site. My final point is this... these are all generic rules so pay attention to the details.

Re: Event Mar. 31: Navigating business taxes with TurboTax

jackzee — Tue, 31 Mar 2009 18:20:53 GMT

What tax deduction opportunities do I have with used office purchases (e.g. I purchased an old counter and some other used furniture)?

Re: Event Mar. 31: Navigating business taxes with TurboTax

bmeighan — Tue, 31 Mar 2009 18:29:28 GMT

Bernoulli... For assets used for personal and business, you should allocate the deduction betweeen the two based on its use. The great thing about tax software like TurboTax is that it will do all this work for you. With TurboTax, you simply identify the equipment and how much you use it for business. TurboTax will do the rest including determining it's "useful life", depreciation deduction, etc. Keep in mind that with most tax rules, there are some exceptions. For example, there are special rules for assets known as "listed property." This includes computers. I hate all these details and that's why I honestly rely on tax software to do the hard stuff.

Re: Event Mar. 31: Navigating business taxes with TurboTax

CommunityTeam — Tue, 31 Mar 2009 18:25:59 GMT

Don't forget to refresh your screens to see Bob's latest response. We are at the half hour mark, Community get your questions in now. Simply login to your account and hit reply to post your question.