Business is looking up! We’re hearing from lots of our clients who are now turning their business and investments around.
During the last few years, when things were down, they may not have kept good track of their expenses for their tax returns and, in some cases, even not filed returns. After all, everything was a loss and there was no tax due.
And now that times are changing, they’ve discovered that those past losses can mean money in their pocket.
One of our Cash Flow Accounting clients had been overwhelmed by a business loss and the loss of a lot of properties in 2008. Records were all over the place and now the IRS wanted what they thought were their fair share of taxes too.
The client came to us at Cash Flow Accounting because they needed both – accounting and tax and the tax return was all reported on their personal return. For more sophisticated tax returns and ongoing annual consulting, the work is done through our sister company, US Tax Aid Services.
In this case, there hadn’t been a tax return filed for a few years and the IRS had gone ahead and filed a return on their behalf. When the IRS does that, they count every bit of income that the know about from 1099s, W-2s and K-1s. And they don’t give you any credit for any deductions, even if they know about them.
Now it’s up to you tell them they’re wrong and there is a very short window to get that done in.
In this case, we did the bookkeeping fast and found out that there was actually a loss of almost $200,000. Not only was there NOTHING due to the IRS, there was a huge net operating loss to carry-forward. And now that the economy is up that’s like money in the bank.
If you took some short-cuts or forgot to file some returns, come clean now. The losses can be money to you down the road.