NEW YORK
Business owners can find it a tall order to complete their tax returns while also running their companies. When an owner is distracted, or not paying close attention to IRS rules, that’s when mistakes happen. Some of the common ones to avoid:
• If you’re a freelancer or independent contractor, make sure you have all the 1099 forms you need from people or companies you’ve worked for. If you file your return and you’re missing any of your 1099s, you’ll be hearing from the IRS. The government cross checks the 1099 copies it gets with the amount of income you report, and if there’s a discrepancy, the IRS will want to know why.
• If your business is a partnership, be sure the income and deductions reported to the IRS on your firm’s Schedule K-1, Partner’s Share of Income, Deductions, Credits, etc., matches what you report on your Form 1040. If you find an error on the K-1, make sure the form is corrected before you file your return.
• If you’re deducting the cost of business meals and entertainment, you can claim only half the amount you spent.
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