Unless it is a refund check, no one gets happy when a tax letter comes in the mail. If you own a small business, the chances of you receiving tax notices from authority agencies are much higher. So what should you do when you are the recipient of those letters and notices?
First, do not panic! Just because the government wants to tell you something does not mean it’s terrible, or that you did something wrong.
Second, quickly scan through the envelope or the cover. Find out where it came from. The usual ones are from:
- Federal government - the IRS, Department of Treasury, Social Security Administration, SBA, etc..
- The state government - Department of Revenue, Department of Labor
- Local authorities - county, city or township
Third, identify the type of tax issue. These are the typical taxes small businesses are subject to:
- Federal income tax
- Federal payroll tax (withholding, FICA, social security, medicare, and federal unemployment)
- State income tax
- State payroll tax (state unemployment, disability, workforce development, family leave)
- State sales tax
- City or local income tax - in the state of Pennsylvania
- City or local payroll tax - in the state of Pennsylvania
Lastly, look for the period of the issue. Tax compliance is perpetual, so you want to find out what year, quarter, or month the tax issue was in.
Once the above-mentioned information has been spotted, you can start looking in your archive for the specific documentation that can substantiate the tax filing or payment stated on the notice.
Work with a professional accountant
When you have a professional accountant on your team, it's best to get them involved. Highly skilled and experienced accountants can explain the notice to you and resolve the issue for you as long as you are not financially insolvent. Do not try to verbally tell them what the notice is about as important information can get lost in translation. The most efficient way is forwarding the notice to them. Let the professional do what they are good at, which is reviewing and analyzing the information. Ultimately they can provide you with the service you need to get the issue resolved and behind you.
HOW SCHWARTZ IS HELPING SOUTH JERSEY SMALL BUSINESS OWNERS
Navigating these legal changes and what it means for your small business in New Jersey can be one of the biggest challenges you face in the coming years. Fortunately, Schwartz & Associates is already familiar with relevant tax laws and regulations you need to comply with, including the impact of the Biden Administration's new tax proposals. The American Families Plan (AFP) and American Jobs Plan (AJP) will bring with them new taxes on businesses in the coming year, and Schwartz is prepared to ensure your South Jersey business is not only in compliance but maximizing its benefits.
Contact us for more insight into what these changes may mean for your business specifically and what we can do to ensure you're getting the most out of your deductions.