Q: When I file an extension does this allow me to extend payments of any taxes due?
A: No. To avoid any late payment penalties all taxes due must be paid by the due date of the return without regard to extensions.
Q: How do know how much I owe if my taxes are not completed?
A: You must do your best to estimate what is owed; any unpaid taxes will be penalized.
Q: Is it true that taking a home office deduction will trigger a red flag?
A: No it is a very common deduction.
Q: I am a sole proprietor should I incorporate?
A: It depends. There are several benefits to incorporating that may result in tax savings. Each situation is different, you should discuss your situation with a tax professional.
Q: When are my taxes due?
A: Personal – 4/15. Partnerships and Corporations – 3/15. Extensions add six months for filing only.
Q: Whats the difference between an asset and an expense?
A: Assets have a value that lasts more than a year. ie a computer.
Q: How long do I keep my tax records?
A: For IRS purposes you must keep your records for as long as the audit period is open. This is usually three years from the filing date including extensions.
Q: When are meals deductible?
A: Meals that are for an allowable business purpose are deductible. Proper records must be kept, noting date,place, who with and business purpose and a payment receipt.
Q: If I am out of the office running errands and I stop for lunch does this qualify as a deductible business meal?
A: No according to the IRS.
Q: When I drive from my home to my office does this qualify as business mileage?
A: No its considered commuting.