We had the pleasure of hosting a small business Twitter TaxChat15 with Andrew Schrage from Money Crashers with the help of MasterCard. We asked 9 thought provoking tax questions to Andrew and the rest of the community. If you were unable to join the chat, we’ve compiled the key highlights from the discussion below.
Not ready to file?
We opened the discussion by asking what a small business should do if they are not ready to file their tax return because they don’t have all of their documentation in place. We recommended that you file and pay as much as you can of the estimated tax liability.
@BIDaWIZ Don't put your head in the sand! File for an extension
— Money Crashers (@MoneyCrashers) April 7, 2015
Does filing an extension increase our chances of an audit?
To the surprise of some, filing for an extension does not in itself increase the probability that the tax return will be subject to an audit.
@BIDaWIZ That is a commonly held belief but there is no reason that will be the case as long as you do your due dilligence #taxchat15
— Money Crashers (@MoneyCrashers) April 7, 2015
Should we file with software or hire a tax professional?
The consensus from the community was that working with a tax professional is easier, quicker and in some cases cheaper than using software to file a small business tax return. We tend to agree.
@BIDaWIZ If you can find a tax pro to help you I'd go that route because software can have extra time-consuming hurdles #taxchat15
— Money Crashers (@MoneyCrashers) April 7, 2015
Do we need to keep all of our receipts to claim expenses?
There were some differences in opinion on this inquiry. Some respondents indicated that we need to keep all receipts if the business is claiming an expense, while others didn’t think you need to have them for small expenses. As we advised, it depends on the type of expense, but it certainly doesn’t hurt to keep receipts for a certain period of time.
@BIDaWIZ @MoneyCrashers I didn't realize that it was so high. Lodging we always keep #taxchat15
— Linda F (@CTSweeper) April 7, 2015
Who is responsible for mistakes on the tax return?
Even if you work with a tax professional, your business is still responsible for any mistakes. Of course, the professional is expected to prepare a return in accordance with the regulations, but the small business still needs to review and ensure the accuracy of the tax return.
@BIDaWIZ @MoneyCrashers Q8 probably since the business signs the return and provides the info #taxchat15
— Linda F (@CTSweeper) April 7, 2015
To follow the entire discussion, you can visit the hashtag: #TaxChat15
