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September 2008
Issue: 13
Extended Tax Return Deadline Approaching
 
I hope everyone is enjoying the last couple weeks of summer!  Of course, the end of summer also means more tax deadlines.  If you filed for an extension of time to file your individual or corporate tax return last spring, the deadlines for filing these returns is rapidly approaching.  The deadline for extended corporate tax returns (S Corp & C Corp) is September 15th while the deadline for extended individual income tax returns is October 15th.  We filed a lot of extensions for our clients this year so we expect to be very busy leading up to both of these deadlines.  If you filed for an extension and still need to file your return, we encourage you to contact us as soon as possible so we can get started on your return to ensure that it will be filed by the deadline.  Remember, you must file your 2007 individual tax return by October 15th in order to qualify for the economic stimulus payment.
 
Also, the 3rd installment of the 2008 estimated tax payments for individuals is due by September 15th.  If you make estimated tax payments, be sure to send your payments in by the 15th to avoid penalties.
 
Enjoy this months newsletter!
Hobby Losses: Convincing the IRS That a Business Is Legitimate
 
The tax law is all about semantics. For instance, if you're legitimately trying to make a profit in an endeavor, it may be classified as a "business" by the IRS. In that case, you can deduct the full amount of expenses relating to the business operation. Typically, you might show losses in the early years of ownership. These losses can be used to offset highly-taxed income such as investment earnings or wages from a full-time job (either yours, your spouse's, or both).

Read more...
Business owners often prefer to use independent contractors for some tasks rather than employees. Advantages to using independent contractors:
 
- More flexibility in personnel assignments, including the ability to assign projects to people with specific expertise when needed.
- No outlays for payroll taxes, including Medicare, Social Security, unemployment, and withheld income taxes...
 
In This Issue
Hobby Losses: Convincing The IRS That A Business Is Legitimate
Avoid The Independent Contractor Trap
Put Away More For Retirement With A Solo 401(k) Plan
Upcoming Tax Deadlines
 
If your business is essentially a one-person operation, there's an option to help you save more money for retirement: The Solo 401(k) plan.

Ordinarily, traditional defined contribution retirement plans allow annual contributions that are limited to either 25 percent of salary if you're employed by your own S or C corporation or 20 percent of self-employment income if you operate as a sole proprietor or single member LLC.
 

Upcoming Tax Deadlines

September 15th - Extended Corporate Tax Returns are due (S Corps & C Corps)
 
September 15th - August payroll depoits are due for monthly payroll tax depositors
 
October 15th - Extended  Individual & Partnership Tax Returns are due (Form 1040 & Form 1065)
 
Please let us know if there is anything we can do for you!!

Thomas R. Vetscher, CPA
John T. Vetscher, CPA

651-690-2250

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