Small Business Owners Get Ten Top Tax Tips from Ten Top Tax Experts

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Leading experts in small business taxes are offering fresh advice and insights to small business owners this tax season. Facing a difficult economy and new tax changes, many small business owners will need to be especially alert to pitfalls and opportunities.

From across the U.S., leading small business tax and accounting experts are offering fresh advice and insights to small business owners this tax season, according to Moore Stephens North America Inc., an association of independent accounting firms.

Facing a difficult economy and new tax changes, many small business owners will need to be especially alert to pitfalls and opportunities this tax season, according to Moore Stephens North America Inc., which represents 125 offices in North America and $1 billion in annual revenue. To find the office near you, call (201) 291-2660, or email: theteam(at)msnainc(dot)org. In addition, each of these tax professionals is available to comment on any or all of the tips mentioned here.

The Top Ten Tax Tips for Small Business for Tax Season 2010

1. Don't procrastinate.

"Many companies are probably more worried about the economy than about their taxes right now, but that could be a mistake. As bad as the economy is, you need to know your options before it's time to pay your taxes. Even if you had a bad year, you may owe taxes (surprise!) or you could get significant refunds of much needed cash from net operating losses. So don't avoid your accountant."
-- Larry McKoy, CPA/PFS, CPA
Senior Tax Partner
Goodman & Company LLP
Richmond, Va.
Contact: (804) 474-1306

2. Take advantage of the new rules for business losses.

"Small business owners need to plan for their net operating losses (NOLs). An election must be made at the time the 2009 tax return is filed to either carryback or carryforward the current year NOL. The taxpayer needs to look at the tax rates and income levels in the prior years. If they were not substantial and income is expected to increase in the future, it may be better to carry the loss forward."
-- Stacey J. Dell, CPA
Tax Partner
Mohler, Nixon & Williams
Campbell, CA
Contact: (408) 369-2432

3. Depreciation is your friend.

"Be sure to maximize the depreciation deductions available by using the Section 179 immediate deduction of certain fixed assets and the 50 percent bonus depreciation for purchasing new assets. Quicker depreciation expenses save tax dollars for other important purposes. Remember that you only get to deduct the cost once. A current deduction is better than a deferred deduction."
-- Claude A. Titche III, CPA
Tax Partner
Beene Garter LLP
Grand Rapids, Mich.
Contact: (800) 824-7882

4. Watch out for surprises from out of state.

"Small business owners need to review their state filing requirements for income tax, personal property or sales and use tax. The states are very aggressive in enforcing their laws and small business owners need not only be aware of the rules in their home state but determine whether their activities in other states trip a filing requirement."
-- Joel Rothenberg, CPA
Tax Partner
DiCicco Gulman and Co., LLP
Boston, MA
Contact: (781) 937-5135

5. Expect extensions.

"As 1099 reporting is allowed to be submitted closer and closer to a tax compliance deadline, more small business owners can expect their business and individual returns to be extended. We educate our clients about the possibility of extending their returns due to the increased compression period in receiving this information so close to tax deadlines. We also assure them that there is no increased risk of their return being selected for examination by extending."
-- Kimberly A. Lawrence, CPA
Tax Principal
Joseph Decosimo & Company, PLLC
Chattanooga, Tenn.
Contact: (423) 756-7100

6. Do the opposite of what we've told you before.

"This year, think about accelerating income and deferring expenses. That is the opposite of everything accountants have typically preached for many years. But this may be the time to look at IRS-approved ways of minimizing taxes through different accounting methods."
-- Christopher E. Axene, CPA
Rea & Associates, Inc.
Dublin, Ohio
Contact: (614) 923-6558

7. Take advantage of depressed asset values.

"In light of the current economic environment, which has driven the market values of businesses downward, small business owners may want to consider transferring stock in their companies to family members as part of their total estate plan."
-- Vincent Paolucci, CPA, MST
Tax Partner
Grassi & Co.
Jericho, N.Y.
Contact: (516) 256-3500

8. Read my lips.

"Tax rates will be going up. Small business owners should be considering what they can do to minimize taxes now and in future years when tax rates go up."
-- Chris Province, CPA
Armanino McKenna LLP
San Ramon, Calif.
Contact: (925) 790.2687

9. The return of the C Corporation.

“The prospect of increased future tax rates also calls for a determination of the most appropriate form of business operation. C corporations may make a comeback if individual tax rates are increased to 39.6 percent; if a surtax of 5.4 percent is imposed on high AGI taxpayers, or if additional Medicare taxes are imposed on high income taxpayers. Paying taxes at C corporation rates may make the most sense, especially during the years when the business needs to build up its equity.”
-- John Smolke, CPA
Peterson Sullivan, LLP
Seattle, WA
Contact: (206) 382-777

10. Take a trip on your P&L to find hidden treasure.

“There’s a line on your P&L statement that has a “hidden” deduction opportunity that could actually generate a significant tax advantage and put cash back into your pocket. The essence of this opportunity is that it may be possible to move certain capitalized items that are currently being written off through depreciation and reclassify them as a repair, and by doing so, change the deduction equation significantly in your favor. Instead of recognizing small amounts of depreciation every year, you get to write off the whole capitalized item this year!"

“There are a couple of speeds bumps along the way before a business owner can realize these tax savings. The clock is ticking on the opportunity to expense these previously capitalized items."

“That trip from balance sheet to P&L to huge tax savings is one that’s well worth taking, and you should be starting your journey now, as the IRS will most likely be closing the road in the very near future.”
-- Bruce B. Zicari II, CPA, CVA
Partner, Small Business Advisory Group
The Bonadio Group
Pittsford, NY
Contact: (585) 249-2774

About Moore Stephens North America Inc.:
Moore Stephens North America (MSNA) is a progressive accounting firm association, whose 50-plus member firms based in the US, Canada, Mexico and the Caribbean, are on the cutting edge of service offerings designed to meet the growing challenges faced by their clients. The firms in MSNA have long been able to pool their complementary skill sets and industry and technical practice area niches. This ability to house a depth and breadth of service offerings and expertise within an accounting firm association enables MSNA to compete with the Big 4 and other large national firms. Combined member firm revenues of over $1 billion generated by nearly 125 offices located in major markets..

Because Moore Stephens North America accounting firms are independent of one another, the accessibility of multiple professional services can be offered in a “one-stop shopping” approach. Formed in the mid-1970s, the Moore Stephens North America accounting group is one of six regional members of Moore Stephens International Limited, headquartered in London, which celebrated its 100th anniversary in 2006. Embracing Thomas Friedman’s well-known mantra "the world is flat," the need for interconnectivity takes on greater importance across the globe. Moore Stephens affiliates can be found in nearly 100 countries, in over 600 offices worldwide, enabling it to deliver on its philosophy: Global Reach with a Local Perspective.

Steven E. Sacks, CPA
Executive Director
Moore Stephens North America Inc.
ssacks (at) msnainc (dot) org
Phone: (201) 291-2660


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