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Washington Watch - April 8, 2009


Last Minute Small Business Tax Tips From NASE National Tax Advisor, CPA
With Tax Day next week, is your return gathering dust in your home office? The NASE has one piece of advice – take a deep breath.

"If you are running behind this year, there is no need to panic," said Keith Hall, NASE's National Tax Advisor. "As long as you have all of your paperwork gathered in one place before starting and take the time to check your math, you'll likely have no problem getting your return filed by April 15th."

Hall offers these last minute tax tips for small-business owners who are starting to sweat:

— Check for hidden deductions: There are a number of deductions that small-business owners and the self-employed forget when filing taxes. If you work out of your home, your office may qualify for a deduction. Do you drive to the post office or a client site? Those miles may add up to a sizable deduction too.

— Retirement Savings: Retirement savings, such as SEP contributions and IRA deposits, are deductible for last year's tax return up until April 15, 2009. That means you can count money deposited into these accounts, up until the day you file your 2008 tax return. In the case of SEP contributions, those can even be made up until an extended due date, as late as October 15th.

— Filing Date:
If, despite all your rushing around, you still can't make the April deadline, relax. All tax filers can get an automatic 6-month extension by filing Form 4868 by April 15th, which you can download from the IRS Web site at www.irs.gov/. However, an extension of time to file is not an extension to pay. If you do not send the IRS what you think you owe, you'll be stuck with late fees and interest.

— Proofread the form: Most of the mistakes on tax returns are simple addition and subtraction errors. Check your math. Then, check your math again.

— Start thinking about next year:
While micro-business owners may be tempted to finish their return and not think about taxes again until next year, now is a great time to reflect on how to reduce your 2009 tax liability. Consider deductions for a home office or employing your children; create a health reimbursement arrangement, which would enable the business to reimburse bona fide employees for all out of pocket medical expenses; reconsider the tax implications of incorporating your business; and research retirement plans designed specifically for the self-employed, including an IRA, SIMPLE, SEP, Single 401(k), and Keogh plan.

— Look for help:
Sole proprietors doing their own taxes can find help from a number of sources, including the NASE's Tax Resource Center, where you can ask the NASE's expert CPAs a question and hear back within a few business days. You can find Schedule C from A to Z, a line-by-line guide for completing the tax form Schedule available online at www.NASE.org. The IRS also offers a Web site and toll-free help line, 1-800-829-1040, for your tax questions.

 


Legislation Introduced To Increase SBA Entrepreneurial Development Programs
Representative Blaine Luetkemeyer (R-Mo.), Ranking Member of the House Small Business Committee’s Subcommittee on Rural Development, Entrepreneurship and Trade, recently introduced legislation aimed at increasing coordination between the Small Business Administration’s existing entrepreneurial development programs.

The bill, the Expanding Entrepreneurship Act of 2009 (H.R. 1842), would establish planning standards within Small Business Administration (SBA) programs such as Small Business Development Centers, Women’s Business Centers, and the Service Corps of Retired Executives (SCORE). The legislation would require maintenance of an entrepreneurial development database and for the SBA to develop a job creation strategy for 2009-2010. H.R. 1842 would have no cost to taxpayers and would eliminate waste through increased coordination between programs.

“Small businesses are the engines that drive our economy, and I am hopeful that my first bill will fuel those engines to help grow the economy and improve the quality of life for all Americans,” said Rep. Luetkemeyer. “By assisting our small business owners with this bill, we are laying the foundation for an even stronger economy for many years to come.”

The NASE is a strong supporter of federal small-business programs that have been proved to efficiently aid very small businesses and the self-employed, such as the SBA Office of Advocacy, Small Business Development Centers and the SBA Microloan Program. The NASE encourages the continued support and added funds for the Microloan program, Small Business Development Centers and other existing entrepreneurial outreach initiatives.

 


Senate Confirms Mills As SBA Head
The Senate confirmed Karen Gordon Mills as head of the Small Business Administration by voice vote late last week. Mills was questioned by the Senate Small Business Committee earlier in the week, and was unanimously approved by the committee (18-0) later that day.

Mills, a venture capitalist from Maine, stated at the hearing that her first priority as Administrator would be implementing the provisions of the stimulus aimed at helping small businesses weather the recession.

 




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