Dollars & Sense

Tax Tips: Mid Year

Question: It’s almost halfway through the year and I don’t have a system for keeping control of my records and I have no idea what’s in store for me tax wise for the following filing season. What can I do so that I have a better handle of my business?

Answer: The most important thing is to keep in mind that tax time is not the only time of year to gather your paperwork. You should be getting your paperwork ready for taxes throughout the year and you should know the financial results of your business year at any time. In other words, prepare a profit and loss statement. A profit and loss statement is used to help plan for your taxes, as well as help you spot variances in your business that you may be able to adjust to save you dollars. Based on the profit and loss statement you should also have your tax advisor project your tax situation during the year. You would then have a heads up if you need to accumulate the money for a possible higher than expected tax bill.
Keep in mind that you should probably set a side 25 to 30 percent of the money you earn for possible taxes including the portion that you are sending the IRS through estimated taxes.

Question: I’m currently involved in an audit with the IRS and I’m unhappy with my agent. What should I do?

Answer: You have every right as a taxpayer to talk to the manager of this audit group about the agent and voice your complaints. You can then try to work with the agent again or request a different agent. If you try to work it out, you can always request a different agent later.

Question: I am still having a tough time with the agent and with the manager. I can’t get to first base and I am frustrated. They have issued an audit change report disallowing certain expenses. What can I do now?

Answer: You have the right to an appeal. The beauty of an appeal is you will be able to sit down with an unbiased appeals officer and present your case. It’s an informal one on one meeting. This is called a hearing and can be quite successful.

Question: I received a letter from the IRS that I have 90 days to contest the finding of the IRS in tax court. I don’t want to go to tax court, what should I do?


Answer: If you received the so called “90 day letter” you probably have been lax in responding to the IRS to try and clear up balances due to them. In most cases, you can write the court to request a hearing such as described above. The important thing is don’t panic.

Question: I don’t want to deal with the IRS on any level, what can I do?

Answer: You can always hire a representative such as a tax preparer or tax attorney to handle your tax problems on your behalf.

This article has been presented by PBS Tax & Bookkeeping Service, a company that has been providing income tax and bookkeeping services to the trucking industry for over a quarter century. Contributions to this article were made by Shasta May, Director of Business Development for PBS. If you would like further information, please contact us at 800-697-5153. See our Web Site at www.pbstax.com.

“Everyone’s financial situation is different. This article does not give and is not intended to give specific accounting and/or tax advice. Please consult with your own tax or accounting professional.”