| Every year the IRS delays the processing of millions of | | | | particular type of enterprise. What do I mean by "the |
| income tax returns for the same reasons. Here's the | | | | main forms"? Sole proprietors file Schedule C; regular |
| scoop on three of the most common tax preparation | | | | corporations use Form 1120 and S corporations use |
| blunders and how to avoid them. Mistake #1: Forgetting | | | | Form 1120S; partnerships prepare Form 1065. Those |
| to sign the return. If you omit your signature, the IRS will | | | | forms are not the issue. It's all the other forms that |
| not process the return. Instead, they'll send it back. And | | | | feed numbers into those main forms that folks tend to |
| if you are married filing jointly, both spouses must sign, | | | | forget. Let's call these forms the "supporting forms." |
| and if one spouse signs but the other doesn't, the IRS | | | | Here's a quick review of the most common supporting |
| will treat such a return as invalid and return it. The | | | | forms: Form 4562 is used to report depreciation |
| solution: e-file your return and the signature issue | | | | expense, amortization expense and the Section 179 |
| disappears. Mistake #2: Math errors. Simple calculation | | | | expense deduction. So if you purchase fixed assets |
| errors are also quite common. With the proliferation of | | | | such as computer equipment or office furniture, you |
| tax prep computer software programs, you would | | | | must show the details of these purchases on Form |
| think this problem would have gone away by now. But | | | | 4562. This form is used by business entities of all |
| plenty of folks still do their return the old-fashion way | | | | types. For sole proprietors, two other common |
| (i.e. via pencil and paper), so if your one of those types, | | | | supporting forms are Schedule SE and Form 8829. |
| what can I say? I respect you, but must insist you | | | | Schedule SE is use to calculate the hated |
| consider spending a few dollars this year on to | | | | self-employment tax and Form 8829 is for the home |
| automate the process. Not only will you eliminate the | | | | office deduction. The point here is this: if you report an |
| likelihood of a math error, but you'll save time and lots | | | | amount for depreciation expense or the Section 179 |
| of it. Instead of spending 5, 10, 15 hours or more on | | | | deduction for newly purchased equipment on Schedule |
| your return, using a software program will cut that | | | | C Line 13, then you better include Form 4562 with your |
| down to 2 or 3 hours. Mistake #3: Missing forms. | | | | return. If you take the home office deduction on line 30, |
| Perhaps this blunder is the most understandable of the | | | | be sure to include Form 8829. And if you have a profit |
| three. After all, who isn't overwhelmed by the | | | | on Schedule C Line 31 of at least $400, then you must |
| mind-boggling number of forms you have to prepare | | | | also prepare Schedule SE. Using a software program |
| for the typical small business income tax return? The | | | | will eliminate the possibility of forgetting these |
| problem here has to do with the omission of the forms | | | | supporting forms and schedules. |
| that support the main income tax form for your | | | | |