It is tax time again and most people don't realize there is a great opportunity to get refunds and generate found cash flow at the corporate, business and individual levels.. Instead of waiting for the dreaded March and April deadlines, it is important to consider getting your tax returns done early this year.
Many businesses have lost money in 2008 due to the bad economic times. If you had business losses at the corporate and/or proprietorship levels for 2008 and had income for either/ both 2006 and 2007, you could be eligible for a net operating loss carryback which could generate a substantial tax refund...This could generate a substantial amount of available cash that you may not have anticipated.. You should also consult your tax professional to ascertain where you stand. Additionally, individuals should be talking with their tax advisor to see if there is tax refunds due to them for either overpayment and/or new tax benefits offered by the government....This could generate needed cash either to invest and/or survive debt demands.....
Many businesses have lost money in 2008 due to the bad economic times. If you had business losses at the corporate and/or proprietorship levels for 2008 and had income for either/ both 2006 and 2007, you could be eligible for a net operating loss carryback which could generate a substantial tax refund...This could generate a substantial amount of available cash that you may not have anticipated.. You should also consult your tax professional to ascertain where you stand. Additionally, individuals should be talking with their tax advisor to see if there is tax refunds due to them for either overpayment and/or new tax benefits offered by the government....This could generate needed cash either to invest and/or survive debt demands.....
In order to obtain these objectives, it is highly recommended you get your 2008 books, financial statements in order to ascertain where you stand for the calendar year ended 2008. These books can be prepared by either your in house computer system, a bookkeeper and/or outside accountant. Additionally, you should make sure that your bank accounts are reconciled therefore all cash transactions have been accounted for. Depreciation and all other bookkeeping adjustments should be recorded, therefore giving you an accurate 2008 balance sheet and profit and loss statement.
These 2008 financial statements with appropriate tax adjustments should be compared to the 2006 and 2007 federal income tax returns. In order to get carryback refunds from prior years, the current tax return must be filed first making you eligible to get carryback refunds from prior years.
Here is a brief edited example.... Lets assume the C Corporate Tax Return for 2006 generated taxable income of $30,000 and 2007 taxable income was $40,000. For the current year, the corporation lost $100,000 and paid in estimated taxes of $10,000 for 2008... Based upon this example, the corporation would receive its $10,000 estimated taxes back and could carryback the $100,000 loss back to 2006 and 2007 and recover those taxes paid in those years. In addition, the remaining $30,000 unused losses could be carried forward to year ended 2009 and offset against future taxable incomes....Please consult a tax professional to go over the exact details of your situation.....
Companies that have sole proprietorships or pass thru entities like a S Corporation and/LLC may be able to recover business taxes at the personal level. Once again, obtain all your information for 2008 and sit down with a qualified professional to plan out and execute your situation...
In conclusion, start off 2009 with a quick jump with preparing your tax returns early vs the normal last minute and/or extension type thinking. These tax refund monies could be used for any purpose and get the year off to a good start...
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