Tax season can be a stressful time for anyone, but it is extremely painstaking for the small business community who must navigate through a complex, ever changing tax code.
The good news is you aren't alone. The National Association for the Self-Employed (NASE) is here to help -- and has launched a public awareness effort designed to make the public aware of tax changes while offering assistance to help business owners comply properly. Over the next month leading up to Tax Day, the NASE will release a variety of tax tips to help the public better prepare their 2012 returns. Beginning this week, a new tax tip will be posted weekly on the NASE website.
In his first tip, Keith Hall, NASE's National Tax Advisor, suggests that it's never too early to start thinking about your tax return. By organizing your documents and starting early, you can better prepare yourself.
If you are expecting a refund, the quicker you can get all of those forms filed, the quicker you will get your check back from the IRS. Even if you expect to owe money this year, the quicker you can complete those forms, the more time you will have to plan for cash flow needs before April 15.
Some of the changes to this year's tax filing season include:
• A two-percent increase in the payroll tax rate, which also impacts the self-employment tax rate, because of the expiration of a temporary reduction in Social Security payroll taxes
• The standard mileage rate for business use of an automobile has changed from 2011 rates to 55.5 cents per mile for 2012 (and 56.5 cents for 2013)
• Limits for retirement plan contributions such as IRAs and 401(k) plan have increased
Small business owners should also remember often-overlooked deductions such as the business use of their vehicle and investing in their own future with a tax-deductible retirement plan contribution. Another missed opportunity for those working from home is the home-office tax deduction, but that will soon change.
Millions of America's smallest businesses -- the self-employed and micro-businesses -- and employees who work from their home office, stand to benefit from a new IRS home office standard deduction option recently announced by the Treasury Department. Unfortunately, the public will have to wait until they file their 2013 taxes next year to take advantage of the new streamlined standard deduction option, but still can opt for the existing cumbersome and time-consuming option this April.
The NASE will also make their tax experts available through numerous tax webinar sessions designed to help the public. Each webinar is live with one of the NASE's tax experts and allows participants to submit questions to be answered live on the webinar by the expert.
Our goal at the NASE is to help America's smallest businesses file returns that are not only accurate, but also maximizes their tax savings. This is critical to the small business community who want to our businesses grow, which in turn helps rebuild our national economy.