document.write('<p><b><font class="heading">7 Biggest Misconceptions Business Owners Have About Their Returns</font></b></p><p><font c');
document.write('lass="text">Regardless of how life changes, one of the biggest hurdles you’ll face in running your own business is to st');
document.write('ay on top of your numerous obligations to federal, state, and local tax agencies. A tax headache is only one mistake awa');
document.write('y, be it a missed payment or filing deadline, an improperly claimed deduction, or incomplete records.</p><p>You can sa');
document.write('fely assume that a tax auditor presenting an assessment of additional taxes, penalties, and interest will not look kindl');
document.write('y on an “I didn’t know I was required to do that” claim. The old legal saying that “ignorance of the law is no excuse” i');
document.write('s perhaps most often applied in tax settings. On the other hand, it is surprising how many small businesses actually <i>');
document.write('overpay</i> their taxes. They often neglect to take deductions they’re legally entitled to, or just don’t know about cer');
document.write('tain breaks that can help them lower their tax bill.</p><p>Adding to the mayhem, we have tax codes that seem to be in ');
document.write('a constant state of flux. Creating exceptions for special groups has resulted in a steady stream of new and revised tax ');
document.write('laws, which have lengthened the <i>Internal Revenue Code</i> to over 4,500 pages and rendered it barely understandable t');
document.write('o even the most experienced tax professionals. Often one section can run up to several hundred pages. A special tax serv');
document.write('ice used by tax professionals explains the meaning and application of each part of the code. It is contained in another ');
document.write('12 volumes! The harder Congress tries to simplify the code, the more complex it becomes.</p><p>Preparing your taxes an');
document.write('d strategizing how to keep more of your hard-earned dollars in your pocket becomes increasingly difficult with each pass');
document.write('ing year. Your best course of action to save time, frustration, MONEY, and (God forbid) an auditor knocking on your door');
document.write(', is to have a professional accountant handle your taxes. Tax professionals have years of experience with tax preparatio');
document.write('n, religiously attend tax seminars, read scores of journals, magazines, and monthly tax tips, among other things, to cor');
document.write('rectly interpret the changing tax code and gain the advantage over the IRS.</p><p>Nevertheless, many accountants don’t');
document.write(' understand the mammoth tax code and end up being too conservative with your tax deductions. The more conservative they ');
document.write('are, the more taxes you end up paying.</p><p>Unfortunately, the cryptic and mystifying nature of the tax code generate');
document.write('s a lot of folklore and misinformation that also leads to costly mistakes. Here is a list of some common small business ');
document.write('tax misperceptions:</p><p><b>1. All Start-Up Costs Are Immediately Deductible</b></p><p>');
document.write('The American Jobs Creation Act of 2004 allows new small business owners to immediately deduct up to $5,000 of ');
document.write('their start-up costs as long as they don’t exceed $50,000. The only catch is that in order to take advantage ');
document.write('of the immediate deduction you must spread out the remainder of your start-up costs ');
document.write('over 15 years \(180 months\).</p><p>So the immediate deduction is a good option for businesses with less than ');
document.write('$14,000 of start-up expenses. If you’re startup expenses are greater than $14,000, then you’ll do better by ');
document.write('not taking an immediate deduction but spreading your start-up costs over 5 years \(60 months\).</p>');
document.write('<p>&nbsp;<br><b>2. Overpaying The IRS Makes You “Audit Proof”</b></p><p>The IRS doesn’t care if you pay the right amount of ');
document.write('taxes or overpay your taxes. They <b><u>do</u></b> care if you pay less than you owe and you can’t substantiate your ded');
document.write('uctions. Even if you overpay in one area, the IRS will still hit you with interest and penalties if you underpay in anot');
document.write('her. It is never a good idea to knowingly or unknowingly overpay the IRS. The best way to “Audit Proof” yourself is to p');
document.write('roperly document your expenses and make sure you are getting good advice from your tax accountant.</p><p>&nbsp;<br><b>');
document.write('3. Being incorporated enables you to take more deductions.</b></p><p>Aside from health insurance, deductions for the s');
document.write('elf-employed (sole-proprietors and S Corps) are pretty much equivalent to corporate deductions. For many small businesse');
document.write('s, being incorporated is an unnecessary expense and burden. Start-ups can spend $1,000 in legal and accounting fees to s');
document.write('et up a corporation, only to determine shortly after that they want to change their name or company direction. Plenty of');
document.write(' small business owners who incorporate don’t make money for the first few years and find themselves saddled with minimum');
document.write(' corporate tax payments and no income.</p><p>&nbsp;<br><b>4. The home office deduction is a red flag for an audit.</b>');
document.write('</p><p>This is no longer as true as it once was. Because of the proliferation of home offices, tax officials cannot po');
document.write('ssibly audit all tax returns containing the home office deduction. A high deduction-to-income ratio tends to lead to an ');
document.write('audit.</p><p>&nbsp;<br><b>5. If you don’t take the home office deduction, business expenses are not deductible.</b></p');
document.write('><p>You are still eligible to take deductions for business supplies, business-related phone bills, travel expenses, pr');
document.write('inting, wages paid to employees or contract workers, depreciation of equipment used for your business, and other expense');
document.write('s related to running a home-based business, whether or not you take the home office deduction.</p><p>&nbsp;<br><b>6. T');
document.write('aking an extension on your taxes is an extension to pay taxes.</b></p><p>Extensions enable you to extend your filing d');
document.write('ate only. If you do not pay taxes on time, penalties and interest begin accruing from the due date.</p><p><b>&nbsp;<br');
document.write('>7. Part-time business owners cannot set up self-employed pensions.</b></p><p>If you start up a company while you have');
document.write(' a salaried position complete with a 401K plan, you can still set up a SEP-IRA for your business and take the deduction.');
document.write('</p><p>&nbsp;<br>Besides avoiding these pitfalls, possessing basic knowledge of how the tax system works is also benef');
document.write('icial. After all, even if you delegate the tax preparation to someone else, you are still liable for the accuracy of you');
document.write('r tax returns. If your accountant messes up, you pay the penalty, not him.</p>');