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Gene: Hey everybody, this is Gene Marks and welcome to this week’s Small Biz Ahead podcast. This week’s topic has to do with your taxes. Now, don’t turn me off because this is a really, really important topic for you. If you are a business owner and you are obviously going to be filing your taxes this year, and I’m a CPA, and I know you can’t see me in this podcast, but trust me, if you took one look at my face, you’d know that I’m a CPA. I have some advice for you. You better file early. You got to get on the game this year in particular because the tax filing season started in late January and already the internal revenue services is warning individuals and small business owners, that’s you and me to expect delays.
Gene: I’m going to read you a quote, okay. This is from IRS commissioner, Charles Rettig. He said in a statement just last week in many areas, we are unable to deliver the amount of service and enforcement that our taxpayers and tax system deserves and needs. This is frustrating for taxpayers, the IRS employees and for me. IRS employees want to do more and we will continue in 2022 to do everything possible with the resources available to us. Doesn’t sound good for the IRS. They are behind, they are undermanned, they have lack of resources. They’re struggling with finding employees and dealing with COVID just like the rest of us are as well. You would think like, “Okay, good. That lessens the chance of them coming after me.” That’s not really the case, but what it does is, if you’re expecting a refund this year, it could really delay you getting the cash back from the government.
Gene: So let me give you some advice, okay. Advice number one, file early. It’s important to start your tax filing process as early as possible, meet with your accountant now, understand what’s needed, gather the necessary filing and documents, that way your accountant can get a head start on your returns before things really get busy in March and April. Now, remember just as a little reminder if you have a calendar year end company and an S corporation and a partnership like a pass through, your returns are due by March 15th, 2022. C corporations and individual returns are due by April 18th this year. So March 15th, if you’re a pass through business, April 18th, if you’re a C Corp or an individual, just so you know what the dates are, okay. As the season goes on, the IRS becomes overwhelmed with an increasing number of returns being filed and that’s a problem. In addition to that, if you’re going to be using an accounting firm to prepare your taxes, you will expect faster turnaround times earlier in the season, and you can avoid the need to go on extension if that is the case.
Gene: So get all of your information organized, complete, ready to go before sending it to your accountant because often delays are going to occur when you’re chasing down those last few pieces of information that are still missing. Accountants will tell you again and again, the IRS works from the top of the pile down. The government has to get many of the delayed 2020 returns done before they can process 2021. So the name of the game is absolutely filing early, get it done. Number two, file electronically. It is strongly recommended that you should create an online account for yourself and your business. Go to irs.gov/payments/your-online-account. That’s where you can set up your online account. Once you do that, you can then quickly check and receive real time status of your payments and any other notices pertaining to you and your business. It’s very, very important.
Gene: You should also make sure that you’re set up to file electronically because processing times are significantly faster at the IRS when the returns are filed that way. I mean, listen, if you send a paper tax return to the IRS, it could take months to be processed. That’s compared to only a few weeks for electronic filing. It really makes tracking the refund much and much easier as well as, of course, the turnaround time. Also, set up direct deposit for your taxes too, because checks take longer, the money gets deposited right away when you have a direct deposit set up. I mean, waiting for a check to be delivered through the mail, it causes the delays, it creates the risk of a refund check being lost or stolen. Direct deposit really eliminates that issue, okay.
Gene: If you’re still having problems getting a refund from the IRS, you might want to consider their Taxpayer Advocate Service. It’s a standalone service. It’s part of the IRS, but it represents the taxpayer. You can go there. If you go to… Just go on the irs.gov’s website, you’ll see at the very bottom where you can click on IRS Taxpayer Advocate, the department, it’s a dedicated department. That’s dedicated to helping you cut through the red tape and get answers to problems with the agencies, okay.
Gene: Some people have asked me about using tax software, is that a good idea? Sure. There is as long as your return is fairly straightforward and there really are many great tax preparation applications. There’s TurboTax, H&R Block, TaxSlayer, many others that can definitely do the job for you. Just bear in mind if you’re going to do that, you still might want to consider having an expert, a CPA or a tax attorney, just take a couple hours out and review your file before you send it into the IRS just to make sure it’s always good to have an extra set of eyes, particularly someone familiar with your business who can look at your numbers.
Gene: Finally, and if necessary, consider an extension, I mean, you can always extend your tax returns if you’re not prepared to file, but be aware that you will have to have made all of your tax payments by the original due date you could face interest and penalties. Make sure you’ve got all your payments in on time and set yourself up to pay electronically on the internal, the IRS’s website at irs.gov/payments. Just be aware that even if you have any outstanding 2020 returns that are out there, you can still file your 2021 returns. So don’t let that hold you up. But at the same time, you can ask for an extension if you need that more time.
Gene: The bottom line guys is that it’s all about getting in line as soon as possible, okay. Both of your accountant and your IRS, I mean, for many accountants, it’s hard to find clients that want their stuff done in February, right? Because nobody wants it done. Everybody wants it done in March and April. So if you can get your stuff in soon, rather than later, you will not only get the attention of your accountant quicker, that accountant will be able to turn it around and get it to the IRS and you can get your money back. If you’re going to wait until like April to file your returns and you’re expecting a refund, you’re going to be lucky to see that refund sometime before the summer. So you’re really want to get on the ball and do it.
Gene: So bottom line is this, all right, file early, file electronically, get help from the Taxpayer Advocacy Service, consider using tax software. And if necessary, consider an extension. Just get the work done, now. Put it all aside, particularly if you’re expecting a refund from your returns. Hope this information helps. You’ve been listening to the Hartford, Small Biz Ahead podcast. If you have any need for advice or help and want to listen to more of our podcast between me and Jon Aidukonis, please join us at smallbizahead.com. Even so, my name is Gene Marks. I am your host. I will be back next week with more information about helping you and your business and check out our other podcasts that I’m doing with Jon as well. Thanks for joining me this week. Hope you found this information helpful. We look forward to coming back to you soon. Take care.
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