Here are 3 things to consider before you file your 2008 tax return. This is in an unusual year, so there are actually 50 things to consider, but we’ll start with the top 3.
(1) How much tax did you pay in 2006 and 2007? If you were at a higher tax bracket then you were for 2008, do you want to push expenses (where possible) into 2008’s tax return to create a loss carryback? Net operating loss carrybacks will go first to your 2007 income tax. If your 2007 income is wiped out by the 2008 loss carryback and there is still loss left, then the rest will go back toward your 2006 income tax.
NOTE: One of the changes that Obama is calling for is the ability to take your losses all the way back to 2003. I think that’s a great way for people who have just gotten hammered by losses in thi economy to immediately recoup some income.
One more thing to note: not all states follow the federal guidelines in allowing net operating loss carrybacks. You may find yourself taking a loss carryback for federal purposes and a loss carryforward for state purposes.
Confusing? You bet! That’s why I want you to come join me at the Before You File: Last Minute Tax Tips for Business Owners and Investors seminar on February 20, 2009. I’ll give you the straight scoop on these tips PLUS the IRS audit red flags for 2008.
If you can’t make it, we will be making the audio from the program into an online course. BUT the price will be higher than if you come hang out with me in San Diego. (And by the way, the trip and seminar will be a write off against your business.)
(2) Dots your i’s and cross your t’s if you have a real estate loss that you’re reporting. The IRS is watching!
There are two big red flags this year to watch out for when you file your return. Real estate is one of them. The IRS is closely watching limited partnerships (Form 1065) with real estate losses, real estate losses reporting on the wrong form (Schedule C, for example) and passive real estate losses taken against active income. Make sure you’re very sure of the rules before you take a real estate loss of any kind on your tax return.
(3) Watch out for Schedule Cs!
The IRS is putting self-employed individuals at the top of their hit list for 2009. If you have a single member LLC and haven’t elected how you want to be taxed, it’s not too late. If you have a Sole Proprietorship, incorporate soon. Meanwhile, make sure you’ve got impeccable records for your 2008 return. Chances are good you’ll be audited.
We’ve also heard rumblings that single member LLCs that hold real estate are about to get hit by the IRS in round 2 of the intensive real estate investor audits.
These are NASTY audits, with teams of auditors turning up the heat. Avoid them by learning how to stay under the radar.
The most affordable way to get the valuable Before You File! information is by joining me in San Diego at the Friday, February 20, 2009 evening seminar. If you can’t make it, we will have the information-packed audio course “Before You File: Last Minute Tax Strategies for Business Owners and Investors” available for $99 after the seminar.
To register for both the Friday, February 20, 2009 evening seminar “Before You File! Last Minute Tax Tips for Business Owners & Investors” and Saturday, February 21, 2009 morning seminar “Understanding Financial Statements for Everyday People” for the low price of just $69, please go to TWO SEMINARS.
Seating is limited and once we are sold out, there is no way to add any more. So, please don’t wait!
See you in San Diego!