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5 tips for preparing your small business for an IRS audit

If you recently received a notice from the IRS that they plan to audit your small business, you may be panicking. Take a deep breath. With good planning and a little help, you can get through this.

The IRS conducts three types of audits: correspondence audits, office audits and field audits. They conduct many audits by correspondence, which is only through the mail and used for correcting errors or verifying information. The IRS does regularly conduct field audits for businesses, however, where they come to your place of business to review your records. Here are five tips for preparing your small business for an audit:

Reviewing changes for the tax reform law

2018 will be the first fiscal year the Tax Cuts and Jobs Act of 2017 will come into effect. As we approach the halfway point to Tax Day, the IRS released a statement reminding small business owners to learn about how the changes from the new tax laws will impact their company.

Given the numerous changes that occur to different types of business owners, it can be difficult for small businesses in Seattle to keep track of what to watch out for when preparing taxes for their companies. It is important to familiarize yourself as soon as possible so you can begin making changes in your tax plans and to avoid suffering any consequences from procrastination.

Online retailers may now have to pay tax on online sales

A recent U.S. Supreme Court ruling has many small online retailers panicking. The high court ruled that states are now allowed to collect tax from online sellers who sell to consumers in their state. In other words, if a Seattle resident orders from an online store based in Tennessee, the Tennessee-based stored will need to start charging buyers sales tax, as well as paying this tax to Washington state.

What small businesses cannot do to qualify for new tax break

With the announcement of the 20 percent income tax break, many small businesses in Seattle are changing their tactics quickly to qualify for it. They go to their accountants who suggest potentially risky ideas that coincide with the new law and could be beneficial in saving the company money.

However, the IRS recently proposed laws on these deductions to limit what some business owners are able to do to qualify for the tax break. Before you consult with your accountant on ways you can take advantage of this new law, you should be aware of how you could lose your eligibility for it.

Solutions for mounting tax debt

Debt is stressful and can negatively impact daily life. Screening calls in fear of creditors and ignoring mail as it compiles is no way to live. Tax debt only gets worse if you ignore it. Plan to eliminate tax debt with the following potential strategies.

Pay down debts with a budget

7 examples of reasonable causes for IRS penalty abatement

When federal tax obligations are not met, whether by accident or intention, hefty fees and/or penalties may occur. The good news is the IRS will take into consideration an array of reasonable causes for failure to file a tax return or late payments. If an individual or a business can establish a reasonable cause, it may be wise to request a penalty abatement from the IRS. The IRS will consider waiving penalties and/or fees for various sound reasons.

Ways to request penalty relief

A tariff bill could have wide-ranging impact on U.S manufacturing

Before Donald Trump was president, he garnered headlines by promising to return product manufacturing to the United States. He visited North Carolina and singled out a local company, Leviton Manufacturing. The company, a maker of light switches and electrical outlets, had closed factories in the state and was outsourcing its manufacturing overseas. According to The Atlantic, Trump vowed to raise taxes for companies like Leviton.

You filed for a tax extension. Now what?

Taxpayers received a little extra time to file their taxes this year. The usual federal tax deadline is April 15th, however, due to the weekend and Emancipation Day, taxpayers received an extra two days to file this year. Additionally, the IRS website experienced multiple outages hours before the midnight filing deadline. Due to the issue, the IRS is giving taxpayers until midnight, April 18th, to file.

If you needed extra time to gather information and file your 2017 tax return then you may have filed for an extension. The IRS expected more than 13 million extension requests last year, so you are not alone if you did not meet the deadline. You can now avoid the failure-to-file penalty. You have taken the right measures to submit the appropriate forms, but that does not mean you are shielded from other types of penalties.

IRS ending voluntary disclosure for foreign assets

The Internal Revenue Service (IRS) announced an end to the Offshore Voluntary Disclosure Program (OVDP). The program will end on September 28, 2018, leaving tax payers six months to voluntarily disclose foreign financial assets. Business owners with undisclosed foreign assets should utilize the time to become compliant.

A history of arrears

Take advantage of business tax credits

In the state of Washington, business and occupation (B & O) taxes are a major source of state revenue. No matter what industry your business is in, you may qualify for one or more B & O tax credits and be able to improve your bottom line. Here are a few of the B & O tax credits advantageous to a wide variety of business owners.

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