Advertiser Staff and News Services
Now is the time of year when business owners are trudging to their file cabinets, pulling together the records necessary to complete their taxes.
Corporations must file by March 15; sole proprietors have until April 16. Collectively, more than 17 million business returns will be filed, with many owners going it alone, working through the nettlesome returns and assorted schedules with the painful deliberateness of someone being led to their death.
There’s help out there. In addition to enough books and software to fill a library, there’s plenty of tax information at the source of sources, the Internal Revenue Service. The IRS vastly improved its Web site five years ago and now nearly all publications as well as tax tables, rates and law changes are online.
Taxpayers are taking notice.
In the first three months of this year, the government expects www.irs.gov to receive more than 600 million hits, making it one of the most popular sites on the Web — if "popular" is a term ever used in connection with tax matters. More than 150 million forms were downloaded last year, said Gloria Sutton, a spokeswoman for the IRS in Jacksonville, Fla.
The site is organized by type of business — corporation, sole proprietor or partnership — as well as for specific industries. Do you happen to be a restaurant owner? Type that in, and you’ll learn how customers’ tips should be treated and whether it makes more sense to use the cash or accrual method of accounting.
Anyone using the Web site should keep in mind that it is the "official party line," as one accountant said.
Meanwhile, small-business owners filing for tax year 2000 should keep a few things in mind this year:
 Sole proprietors: Time may be saved by completing a Schedule C-EZ, the shorter version of the Schedule C that sole proprietors file. But to file C-EZ, a business cannot have lost money or had expenses of more than $2,500.
Expense deductions: The mileage reimbursement rate for 2000 is 32.5 cents a mile. There’s an increase, too, to $20,000 in the so-called Section 179 deduction, which allows certain equipment to be expensed in a single year.
Car depreciation: Cars used for business can be depreciated over five years if the purchase price does not exceed $14,460 — what the IRS considers a "luxury" car. More expensive cars can still be depreciated, but over a longer period of time. A car costing $25,000 would take more than 10 years to depreciate.
Business use of the home: Housing and utility expenses can be deducted on taxes, but only if a designated area of the home is used solely for business.
Barter deals: There’s more bartering these days, but the transactions are generally considered taxable income. If a plumber snakes his dentist’s drain in exchange for having a tooth pulled, the plumber should include the value of dental work in his taxes, just as the dentist should for the plumbing.
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