FAQs: Small Businesses

Partnership and S Corporation returns are due on March 15th after the close of the calendar year but can be extended and filed no later than September 15^th.

C corporation returns are due on April 15^th after the close of the calendar year but can be extended and filed no later than October 15th.

An extension of time to file is not an extension of time to pay. All taxes must be paid in full by their original due dates to avoid penalties and interest.

Yes. Contact us to proceed.

People often mistakenly believe that their businesses operating outside of the US are not relevant to their US taxes. In fact, most US citizens and US resident aliens with ownership in foreign entities have informational return filing requirements that are attached to their US individual or business tax returns.

The penalties for failing to file these returns are hefty. The IRS may assert a $10,000 penalty for each failure to file, plus an additional $10,000 for each month the failure continues, beginning 90 days after the taxpayer is notified of the delinquency, up to a maximum of $60,000 per return (initial penalty of $10,000 plus the continuation penalty maximum of $50,000 per return).

Possibly. The Treasury Department requires that if the combined value of your foreign financial accounts (or those for which you have signatory authority) at any time during the year exceeds $10,000, you must file a FinCEN Report 114 online by April 15^th of the subsequent year. The filing of Form FinCEN Report 114 is automatically extended to October 15^th. Foreign accounts include foreign bank accounts, foreign trusts, overseas investment accounts, and foreign retirement accounts if there is a guaranteed payment from the account and if the investor exercises any level of control over the investment, or any financial account for which the taxpayer has signatory authority. Certain taxpayers may also be required to file form 8938 with their tax return. Penalties for not filing these forms can range from $10,000 up to half of the balance of the account. Willfully withholding this information can be cause for criminal charges. Clients who are not sure if they have a filing requirement for foreign bank account reporting should contact us to verify.

You are required to file if you are 1) a citizen or resident of the U.S., 2) a domestic partnership, 3) a domestic corporation, or 4) a domestic estate or trust.

Entertainment expenses are no longer deductible starting in 2018. All meals regardless if they are for travel or training are limited to 50%.

As a reminder expenses incurred in order to operate the business are generally deductible as long as they are “ordinary and necessary”. This describes expenses which are normally incurred in the same line of work and which are not unnecessarily expensive.

In each case, expenses which don’t meet these requirements at a minimum will not be deductible.

S Corporations and partnerships are pass-through entities which have no federal tax due. The pass though income is subject to tax at the individual level. C Corporations are taxable entities and should expect tax due if they are generating a profit.

Before contacting the IRS, contact us as soon as possible.

Audits are fairly rare. However, planning to successfully defend against an audit should always take place when the return is prepared. To this end, good practices include the following:

Original copies of all tax documents going back 3 years (4 years for some states).

Always save receipts to prove any deductions claimed.  If the business maintains a separate credit card account and bank account, copies of statements.

Copies of your reimbursement policies and reports associated with reimbursements.

Mileage logs.

Generally we request the following info:

• To get started we will need a copy of your profit & loss statement and balance sheet in excel.
• List of states that you performed services or sold inventory in, along with a schedule showing the revenue earned in each state.
• List of states that you paid payroll in, along with a schedule showing the payroll paid in each state.
• List of states that you own property in, along with the original basis of the property by state.
• Additional information will be requested after reviewing your financials.

We can provide a template for businesses to easily categorize their expenses for filing. We don’t need (or want) any receipts. Receipts should be kept with your tax records.

You should receive an email confirmation from us by the close of the next business day stating that we received your tax information. This email will usually include a link you will use to pay our fee. We will begin preparing your return after we receive confirmation that the fee is paid. Once we prepare the return we will email you with any outstanding questions. Once those questions are resolved, we will e-file your returns upon receipt of your signed e-file authorization.

We send all our previous clients a link to a secure portal where they can upload their documents safely. If you are a new client or do not have the email with the link please email info@HSTaxCPAs.com.