Three Online Tax Resources for Small-Business Owners
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April 15 is just a few weeks away. Of course you should be finished with your taxes now. But if you're shop is like mine, you spend every free second on your clients. So getting business expenses, forms and tax planning done tends to get pushed to the bottom of the to-do list.
Today all that changes. I offer you -- partly because researching my taxes lets me avoid actually doing them for another day -- three easy-to-use resources that might make your tax prep a little less painful.
1. The IRS Small Business Tax Center
What it is: Small businesses tend to go on about how useless the government is, but the IRS did not take it personally. The Tax Man created an excellent online toolbox for small businesses trying to manage their taxes.
Why you might like it: Whether your question is basic or complex, you'll almost certainly find the answer on this excellent site, which is easy to navigate and understand thanks to features likes the nine-part Virtual Small Business Tax Workshop video series. Tax information is divided up into short, simple documents. The site has good explanations for issues like small business taxation, the alternative minimum tax, 1099 contractors and e-filing. The A-Z Index for Business offers in-site links much of the archive. And, of course, the full complement of tax forms is here, too.
Why you might not: If you're numerically inclined, this site could pump you up to the point where you decide to go the DIY route for tax prep this year. With a simple return, you might be fine. But how your business taxes merge with your personal finance is invariably more complex than it looks. The home office deduction for example, known in the trade as Business Use of Your Home, is a complex calculation involving, among other things, an implied capital gain, an implied depreciation and the percentage of home expenses you spend on work. Unless you are ready to make those figures and have them stand up to an audit, you may still need a professional.
What it is: This easy-to-use online service lets you print, produce and file your own W2 or 1099 forms on the cheap.
Why you might like it: Having just shelled out $150 to my accountant for a trio of 1099s, this service got my attention. Using it is simple. You create a profile for each employee and fill out the proper identification, pay and other info. Then you print a copy to mail to each employee and let wagefiling.com file the form with the IRS electronically -- for $3.49 per filing. My three 1099s would have cost $10.50 rather than $150. Ouch. And online data storage is secure, so you no longer need to keep employees' personal information on premises where it can get stolen.
Why you might not: You are responsible for entering the employees' personal info. So you better be sure it is correct. And I had trouble locating the all-important blank tax forms. If you clear those hurdles, you'd also better have at least a basic understanding of how to decipher and fill out employee payroll data. What, for example, goes in the box labeled "Section 409A deferrals"? How do you handle something like "Excess Golden Par Pmts"? And what do I put in those four scary lines marked, "Other"? You will still need some professional help in managing these forms.
What it is: This online service matches users with accredited accountants and other financial representatives. If a customer and client agree to work together, tax documents are shared via a secure site, and electronic payment can be made there as well. Started in 2009, Teaspiller lists more than 20,000 accountants in about 50 U.S. cities. The company name references both Boston Tea Party protestors and the firm's goal of bringing change to the tax-and-accounting services marketplace, according to CEO Amit Vemuri.
Why you might like it: If you want to hire a professional, Teaspiller aims to make that process simpler for time-strapped SMBs. You enter your city and the specialty you're seeking, and instantly you'll get a list of professional financial-service providers, each with a rating and some with customer reviews. Ratings are derived from a database that pulls in online legal judgments and state or industry sanctions. If you use the service you pay your accountant via credit card, a feature that Vemuri says many accountants don't offer and many of his customers requested.
Why you might not: Users of Facebook and other social networks might expect this site to have more user-generated content, but Teaspiller is more akin to a referral service. Accountants can get a basic listing for free, but if they want an upgraded listing they need to pay $33 to $50 a month. The ability to post and read customer reviews should set this site apart, but there are hardly any reviews posted. Of the 100 listings in New York City, 11 had reviews -- and none had more than three. All those reviews seem to be raves, and every accountant on this list scores a 3.9 or higher on a scale of 1 to 5. So you still need to vet whatever accountant you get from the service.
"We are trying to champion the idea of using new tools in this market," Vemuri says. "Not replace the entire process of finding the right accountant."