No matter how hard you struggle to keep up with the latest changes in small business tax law, there's always something new to learn. Lawmakers just can't resist changing tax laws on a regular basis. Little wonder. Since there are dozens of different taxes that apply to a small business, there's plenty of opportunity for changes. By tracking these changes you can:
- Stay out of trouble with the IRS and state tax agencies.
- Save money by taking advantage of deductions you might have otherwise missed.
- Take advantage of new opportunities that governments provide to encourage business growth.
Turn to the sourceCongress passes tax laws, but the Internal Revenue Service (IRS) is the enforcer that makes sure everyone stays in line. Thankfully, the IRS does a pretty good job of summarizing the relevant information for small business and the self-employed.
summaries of changes to selected topics relevant to businesses, along with a more comprehensive list of changes called Publication 553.
Check the state of your stateState governments also tinker regularly with tax issues that affect small business.
Virginia maintains a single "What's New" page; North Carolina offers separate pages for changes to corporate, excise, and insurance taxes and changes to its sales and use tax; Ohio's Department of Taxation keeps a general page for business, and Florida offers tiny PDF links to a bimonthly "Facts on Tax" at the bottom of its Department of Revenue page. Select your state in the Tax and Accounting Sites Directory.
Turn to business tax expertsInstead of tracking changes yourself, hire someone to tell you precisely which changes will affect your business, and what action you need to take.
Use up-to-date tax softwareMost tax software packages offer new editions yearly that incorporate changes to federal and state tax codes. You have to purchase these new editions, but you can at least deduct the cost.
Follow small business tax newsThe newsletter Small Business Tax News is an excellent way to stay abreast of small business tax matters of all kinds.
- Ignorance of tax law doesn't excuse you from complying with it, so either keep up with changes yourself or hire a tax consultant to help you.
- Don't take advantage of a new tax exemption for a certain type of business development if that development won't further your business aims in the long run.
- Keep your business records updated so that if an expense suddenly becomes deductible, you'll have all the data you need instantly at hand.