Well, it's tax time again. As I try to make some sense of the seemingly bottomless pile of papers required to balance my account with the federal government, it strikes me that now, more than ever, is the perfect time to implement a flat tax.

Let's face it. Our current tax system is broken. It is extremely complicated, with nearly 900 different tax forms in all. It is easily manipulated by those who know how to do so in order to take advantage of the bureaucratic mess and inefficiency that is the tax code. And it stifles growth by penalizing productive behavior, savings and investment. Everyone hates it, and everyone complains about it. It is a system in desperate need of reform, or better yet replacement.

A flat tax is the perfect alternative to what we have today. Implementing a flat tax system would be simple and, more importantly, fair to American taxpayers. Establishing a single, low rate, regardless of income, would treat all taxpayers fairly and equally. If the rate were, for example, 20 percent, then all income would be taxed at 20 cents on the dollar one time and one time only: when it was earned. I don't know what the actual rate should be, but many of the former Soviet republics have adopted flat taxes that range anywhere from just over 10 percent to over 30 percent. Right now, though, it is not the number, but the principle, that is important.

If taxpayer A has 50 times more taxable income than taxpayer B, then taxpayer A pays 50 times more in taxes. What could be fairer than that? Those who argue that the rich should be required to pay a greater percentage in taxes ignore the economic realities of penalizing some of the most productive contributors to the nation's wealth.

Now, I know that some will argue that those at the bottom of the income range suffer more by paying x-percent than those at the top of the income range. This may be true, but it is fundamentally fair. Taxes are the cost of citizenship in a country where people demand services like police and fire protection, roads to drive on, and schools for their children. The costs associated with these citizen demands should be borne equally, with each taxpayer remitting the same percentage of their pay to the government.

A flat tax would also eliminate deductions, credits, exemptions, and all the other items that make the current code so difficult to understand. By simply taxing citizens a single rate on what they earn, there is no need for tax provisions that attempt to dictate behavior. Many flat tax advocates include a set deduction based on family size. Low-income families that have taxable incomes less than the deduction would pay no taxes. I disagree with this approach, as stated before, because I believe that anyone who takes advantage of government services should contribute to the costs associated with those services.

A flat tax would also put an end to the practice of double taxation. By taxing income only once, at the time it is earned, there is no need for the imposition of taxes like the estate tax (or death tax, if you prefer). If the money earned has already been taxed once, why should it be taxed again? Doing so penalizes those who engage in wealth accumulation by saving and investing.

Finally, a flat tax would treat all businesses equally. Corporations or companies would pay taxes to the U.S. government on all income earned within the United States, minus necessary expenses such as labor and investment. Simplifying the tax system for businesses would make the United States more attractive to corporations from around the world.

There was a time in the not so distant past when the majority of companies had very clear cut tax options. They were guided by a set of local, State, and National tax laws. They owed their taxes and they had to pay them. There were creative ways to reduce their burden, but it still remained fairly simplistic compared to today’s global market situation. Ecommerce, or business over the internet, has led to the idea of onshore versus offshore tax implications. Onshore, in this case, refers to a business whose ownership is located in the same physical location as their operations. Offshore refers to the rest of the World.

The unavoidable fact here is that there are certain jurisdictions around the world that might tend to have a much more favorable tax structure than home. It is important to accept that this is the prime reason for going offshore to do business. The offshore locales might talk of other things, but it is the taxes that make or break an onshore/offshore decision every time. Since Ecommerce operates in this unreal electronic world, physical location has become less of an issue. The old adage of location, location, location, no longer means the same thing as it did a mere generation ago.

Some people seem to believe that the world of Ecommerce is a free and unregulated zone where anything goes and there are few or any consequences. This is not true, and each passing day makes it less true as internet regulation continues to increase. Tax planning from an Ecommerce point of view can not be seen as tax avoidance as much as it is tax reduction. This is why tax planning becomes such an important element of Ecommerce. It just is not so simple anymore. The possibilities to reduce tax burdens and increase profitability are staggering and enticing, but they are also a mine field of potential risk. The advice and guidance of professional tax experts is an absolute must to navigate this mine field properly.

The Credit Card Merchant Account that you use in your Ecommerce business is an example of how proper tax planning lays a foundation for prudent business decisions. The Offshore Merchant Account could very well be one of the first steps taken in an Ecommerce operation to move the business offshore. An understanding of the tax laws and reporting requirements of each offshore account as compared to local Merchant Service providers can be a determining factor in this decision making process.

This is March 2007, a month yet before the end of the 2006 tax season, and audit letters from the IRS are already going out, some private tax offices have been closed and some people have been charged with fraud. All because of abuse of this years one time Federal Excise Tax Credit.

The government is refunding the Excise Tax because federal courts ruled that it is an improper tax. The IRS in response must refund the tax to all individuals who can prove they paid the tax. The refund is only for taxes charged as excise tax on long-distance, nothing on local is being refunded. This tax credit is a one time refund.

When examining your past phone bills look for the itemized part of the bill that states Federal Excise Tax. It can be as little as a few cents to a couple dollars. Anything more than that and you may not be looking at the right billing item.

The rule has two ways of filling. The most popular and the one I suggest is to use the standard deduction, where individuals can claim from $30 to $60.
One exemption, the standard refund amount is $30;
Two exemptions, the standard refund amount is $40;
Three exemptions, the standard refund amount is $50;
Four exemptions or more, the standard refund amount is $60.

If you are considering itemizing the tax credit to get the maximum credit, the first and most important rule, you MUST have a copies of the bills that you use to add up your total credit. These bills are from February 28, 2003 to August 1, 2006.

There is a rule that is getting many people into a lot of trouble. The rule is about listing the bundle service tax charges if the Federal Excise Tax in not individually listed out. If you do this you can just about bet you will get your very own nasty-gram from the IRS. Individuals with multiple phones over the three year period may pay some where between $100 to $200 dollars in Federal Excise Tax, yours could be more or less this is meant just as a broad example. If you add the bundled taxes it can get to be more than $1500. If you dare to think the IRS will let that go by, you will be sadly mistaken.

Finding a place to prepare taxes online is not too difficult these days. Finding good advice on how to prepare your taxes can be another story. Tax preparation advice can come from a variety of sources, including government, enterprise, and non-profit. This article covers a few of the major ones.

Government Sources

Believe it or not, one of the best online tax preparation resources is the IRS. You've got to watch your ".govs" and ".coms" though. "Irs.com" is a cleverly disguised informational site fronting for an online tax preparation service. Despite the official-looking building the bare-bones look, all clicks lead to the multi-tiered submission options that may get your taxes to the real IRS, and will put a little cash in their pocket at the same time. I think the actual IRS.gov site looks a bit better, to tell the truth, and that is where you'll need to go to get actual tax information from the government.

Www.irs.gov has gotten better every year at spelling out their procedures and rule changes in plain English. They have finally chosen to begin with the assumption, as the rest of us do, that preparing tax returns is destined to be a confusing process. Just as their telephone interaction has improved, so has their website. It's designed for the consumer, not the accountant and it's a good place to start.

Enterprise Sources

H&R Block is something of an eight hundred pound gorilla in the tax preparation game; not only have they been operating a storefront network for generations but they have also acquired one of the two major tax prep software programs, Tax Cut. Their web site has a collection of related articles that may be of value; topics include tax scams, higher education deductions, the alternative minimum tax and other issues that you could spend significant time searching for. If you're lucky, they've written it up - and their articles are professional and thorough. Other than that, the site is interested in selling its online and software versions of Tax Cut.

There are online tax preparation services galore these days. Some of them hook you up with an accounting firm, a few of them will sell you a software package and send it to you, but most of them walk you through the forms online. When you're done, you can file your federal form electronically. Some, though not all, of the online sites provide state returns as well. You can find a comprehensive list of the services out there on Yahoo at

Scam artists are really pushing the envelope these days on the web. The IRS is warning taxpayers that fake IRS websites have been set up in an effort to trick people into providing information that can be used for identity theft.

The variety and number of scams on the net are legendary. From Nigerian emails offering to send millions if you provide your bank account information to a wide variety of other scams, the net is full of fraudulent sites. The IRS used to be off limits because, well, it was the IRS. No longer.

The IRS sit is the initials followed by the “gov” extension since it is a government site. If you go to com, net or any other extension, you are not at the IRS site. Obviously, you probably shouldn’t provide any personal information at such sites if you are really trying to get it to the IRS.

There is another trick that you should know about when viewing sites. The fact a site looks like what you expect to see means nothing in relation to its authenticity. Scam articles can copy pages directly off a site and recreate it with relative ease. The key is to look at the domain and to find it by conducting a search through Google, Yahoo, MSN or whatever search engine you use. The engines are very good at listing the authentic site to the exclusion of fakes.

Another area to be careful with is your email. The IRS does not send emails to taxpayers. This is true even if the agency really wants to find you! As a matter of course, you should ignore all such emails because they are fakes. Ah, but what if they look really authentic? You can tell they are fake. Run your cursor over any of the links and look at the bottom of your screen for the real URL that pops up. If it says anything other than irsdotgov, it is a fake. You will usually see a bunch of numbers.

It’s that time of year again. Are you one of the lucky ones that are expecting a refund this year? What will you do with all that extra money?

Most people that get a refund from their income taxes spend it right away with out thinking about how far it can actually go. Using your refund wisely this year could even save you thousands of dollars in the future.

If you were to take that refund and put it to your mortgage payment and it was equal to one additional payment per year, you could easily shave off several years of your mortgage. By apply one single additional payment per year to your principle, you can cut your mortgage down by three to five years. By doing this, you can save several thousands, even hundreds of thousands of dollars in the long run by paying just one additional mortgage payment a year.

If you have a credit card that is burning a hole in your pocket, take your refund and pay it towards this card. Who knows, you might even be able to pay it off with your refund. By doing this, you can save several dollars in interest charges.

You do need to do something for yourself. Take A LITTLE and spend it on yourself. You don’t need to go to the Bahamas or to Cancun. Treat yourself to a movie or dinner at a nice restaurant. There is no need to go crazy.

You say you’ve been wanting a new car? Don’t fall into the “Lease Trap” If a new car is still out of reach, don’t panic. Since more than 60% of our trips are within 5 miles of our residents, why not think about an alternative form of transportation. You don’t need to spend all that money on a car right now, do you? Think outside the box and with your tax refund, you can get yourself some reliable transportation that won’t break the bank.

Electric scooters are gaining popularity. They are not just for kids anymore, more and more adults are seeing the benefits of having electric scooters. Scooters are perfect for those short trips to the local grocery. Electric scooters are quiet, good for the environment and easy to maintain.

Electric scooters are not just for kids. In days past, a kids electric scooter was all the rage. Everyone had them, but you would not see adults on them much. Today, adults are buying them for themselves and their parents as well as their kids. You can find people of all ages riding their scooters to work, school, or just tooling around the neighborhoods.

Today’s scooters are perfect for those short trips. Electric scooters these days can go as far 10-25, even up to 30 miles on a single charge. So for those short trips, you don’t have to worry about running out of juice until you get back.

Whatever you decide to do with your tax return, make sure it does not put you further in the hole or is not spent on something that won’t benefit you in the long run.

IRS has refunds totaling approximately $2.2 Billion dollars for tax year 2003

Over 1.8 Million people are due a refund, however they have not filed their 2003 tax return and cannot claim the refund.

In order to collect the money you have to file no later then Tuesday, April 17, 2007.

IRS estimates that half of those who could claim refunds would receive more than $611. In some cases, individuals had taxes withheld from their wages, or made payments against their taxes out of self-employed earnings, but had too little income to require filing a tax return. Some taxpayers may also be eligible for the refundable Earned Income Tax Credit.

What does this mean? It means that even though you DID NOT have to file a tax return, usually because your income was too low, you can still get most if not all, of your federal withholding taxes that was withheld from your wages. BUT only if you file your taxes. AND in many cases, single parent families may be eligible for the Earned Income Tax Credit.

(The EIC credit is nothing to joke about. This could be a refund, between, approximately $2,000 to $4,000.)

The law provides most taxpayers with a three-year window of opportunity for claiming a refund. If no return is filed to claim the refund within three years, the money becomes property of the U.S. Treasury. For 2003 returns, the window closes on April 17, 2007. The law requires that the return be properly addressed, postmarked and mailed by that date. There is no penalty assessed by the IRS for filing a late return qualifying for a refund.

Taxpayers seeking a 2003 refund must have filed a tax return for 2004 and 2005 before IRS will send you a refund. Also the refund will be applied to any amounts still owed to the IRS and may be used to satisfy unpaid child support or past due federal debts such as student loans.

Generally, unmarried individuals qualified for the EITC if in 2003 they earned less than $33,692 and had more than one qualifying child living with them, earned less than $29,666 with one qualifying child, or earned less than $11,230 and had no qualifying child. Limits are slightly higher for married individuals filing jointly.

When a taxpayer owes money on their taxes they need to pay the amount owed before the traditional April 15th deadline. If the amount owed on taxes is not paid before the deadline then federal and state governments can impose a number of late fees and penalties. While there are penalties for failing to a pay taxes on time there are no penalties assessed to individuals who are due a refund, but fail to file their tax returns on time.

Tax season is a stressful time for many taxpayers. With hectic lives and busy schedules it is likely that an individual may not find the time to have their taxes prepared. As previously mentioned there is the chance of late fees and other additional penalties for individuals who owe taxes; therefore, many individuals who are expected to owe money are more likely to find the time to have their taxes completed than those who do not. There are no penalties for taxpayers who are expected to receive a refund to file their taxes late; however, there many be another problem that arises. That problem is what is known as unclaimed tax refunds.

Unclaimed tax refunds are tax refunds that a due to a particular taxpayer; however, they failed to claim them. Unclaimed tax refunds often result when a busy taxpayer who expects a tax refunds puts off sending in their tax forms until it is completely forgotten about. Although the majority of Americans look forward to the day that their tax refund arrives there are still many others who allow their refunds to become unclaimed tax refunds. It is estimated that hundred to thousands of individuals each year fail to file their tax returns which would result in them receiving a refund. Filing a tax refund is a fairly simple process. For under thirty dollars an individual can purchase a tax software program that will make tax preparation easy and quick. Most taxpayers can prepare their own paper taxes by filing out a federal 1040A or a 1040EZ form. Each of these forms are likely to take less than an hour for the average taxpayer to complete.

A taxpayer has until three years after the year that they were supposed to file their tax return to claim their refund. For taxpayers to get their refund they have to file the federal or state tax return forms that they previously failed to file. Since the tax laws change from year to year a taxpayer looking to reclaim their unclaimed tax refund must use a tax form for the year that they missed. By visiting the website of the Internal Revenue Service (IRS) at www.irs.gov an individual can find and download old federal tax forms. The same can be done with most old state tax forms. To do so individuals are encouraged to visit the website of their state tax department and then download the specific forms that they need.

It is hard to imagine why a taxpayer would not want to claim their tax refund. Unclaimed tax refunds do not benefit anyone but the federal or state government. A tax refund is money that is owed to taxpayer because they paid too much in taxes. Why pay more money in taxes than you have to? Act now before your money is forever known as one of the many unclaimed tax refunds.

According to the Internal Revenue Service (IRS) an Estate Tax is a tax that is imposed on your right to transfer your property and belongings after your death. The individual who is in charge of handing and filing an Estate Tax return is often the estate representative. An estate representative can be an family attorney or a family member who was declared the executor of a state in a will. When dealing with an Estate Tax there are number of things that an individual or family must do when preparing to deal with the Internal Revenue Service (IRS).

There are certain restrictions for estates that are subject to the Estate Tax. Each year tax laws are updated or completely changed; therefore, estate representatives or family members are encouraged to review the new Estate Tax laws. At the current time the majority of estates are not subject to an Estate Tax if they are valued at less than one million fifty thousand dollars. The Estate Tax value is expected to increase up to two million dollars for the 2006 year. In addition to meeting a certain estate value, it is also likely that the majority of properties that are jointly owned will not be taxed if at least one property owner is still living.

An Estate Tax return is due to be submitted to the Internal Revenue Service (IRS) nine months after the estate owner passed away. As with regular tax returns it is possible for estate representatives or family members to obtain a deadline extension. If tax is owed on the estate it still needs to be paid before the nine months arrives even if an Estate Tax return deadline was granted. Not paying the estimated amount of estate taxes due can result in late fees or additional penalties.

The Internal Revenue Service (IRS) will determine the amount of Estate Tax owed by taking the fair market value of all property items that were previously owned by the estate owner before he or she passed away. Fair market value takes into account when an item was purchased and exactly how much it is worth today. When all of these items are added up the total is referred to as the Gross Estate. As with traditional tax returns estate taxes are allowed tax credits and tax deductions. When all of these items are computed together the amount of tax owed will be determined.

When an Estate Tax return is being filed with the Internal Revenue Service (IRS) there are a number of other important documents that must be sent along with the return. These items include a copy of a death certificate, copies of property appraisals, copies of litigation documents that may apply to the estate property, and a copy of the deceased’s will. As previously mentioned an Estate Tax return can be filed by a lawyer, an estate representative, or a family member. Individuals can acquire the Form 706: United States Estate (and Generation - Skipping Transfer) Tax Return by contacting the Internal Revenue Service (IRS) or by downloading the form online.

Only a small percentage of Americans are required to file for an Estate Tax return; however, that does not mean that taxpayers do not need to known and understand what an Estate Tax is. A taxpayer may not own a high valued property; however, that does not mean that they cannot inherit one or be named an estate representative by a friend or family member who has passed on.

You have just filed your taxes and you breathe that sigh of relief. It’s over for another year. Or is it? The answer is NO, or at least it should be, because tax season is just about to begin. That’s right. The organization it takes to make the most of your taxes begins now.

As actors it is essential to understand that, regardless of your current income, if you actually intend to make money from your craft, there are ways in which you must treat it like a business. There are two critical concepts you must become familiar with to be fully prepared to do your tax return. Without them, you are not running a business – you are engaged in a hobby – and should never expect that hobby to be financially profitable.

The first is you MUST be organized. Organization means being sure you have all the documentation you need and that you have a place for everything and have everything in its place. You might find that a computer-based program is the answer to keeping all your records in order. If you are more comfortable with paper then be sure to get a paper organizer that is efficient and easy to use. Find tools that work for you and USE THEM throughout the year to keep the records you need to efficiently and effectively file your taxes (For more on this, visit us at AbundanceBound.com - Financial Education and Planning for Actors and Artists for more information and a free CD).

The second important concept is to keep your business finances separate from your personal finances. Have one bank account for your acting career and use this account to deposit all of your acting income and to pay all your acting expenses. This is essential to legitimize the business deductions you take on your tax return. If you want the IRS to recognize your acting career is a business, it should be run out of a separate bank account – not co-mingled with your personal finances. Real businesses do not pay for business expenses out of personal accounts. If you do not have funds in your acting account then you can “loan” your acting business some money from your personal account. Just be sure to keep careful track. Your acting business will pay you back as you start earning a steady acting income.

Become familiar with the tax system and how you can maximize your return. Learn which deductions are allowable to you as an actor so you can ensure you are keeping appropriate records throughout the year. Do not assume that something is deductible simply because you have heard that it is from other actors! The best thing to do is hire a tax professional to handle your taxes, someone who will be able to answer your questions and maximize the amount of money you can save. Remember, you have to spend money to make money. There are, for example, accountants that focus on preparing tax returns for actors and/or other entertainment industry professionals. An accountant that specializes in filing returns in your area of expertise may be your best choice.

The key is to know your options, be organized, and conduct yourself in a professional manner. A very helpful resource to understand taxes better is the book Lower Your Taxes – Big Time! Wealth-Building, Tax Reduction Secrets from an IRS Insider by Sandy Botkin, CPA, Esq. You will find valuable tips and rules explained in a way that completely non technical people can understand. The chapter entitled “How to Shield Yourself from the IRS Weapon of Classifying a Business as a Hobby” is absolutely critical and will pay you back for the cost of the book many times over.

Whatever you do, do not leave your tax preparation until mere weeks before your return is due to be filed. This will cause you an un-necessary amount of stress and may cause trouble for you with the IRS if you do not have your documents in order. It may also cost you money you can’t afford to pay.

Not every one will need the use of a tax attorney but their usefulness cannot be underestimated when you do need to hire one. First understand that there is a big difference between a tax attorney and a person who prepares taxes, such as a CPA or bookkeeper. If you hire an attorney, anything you say to them is completely confidential. Unlike a CPA or bookkeeper that can be called to testify against you in court should you ever be audited and brought to trial. There are several reasons you may need to hire a tax attorney.

The first and most common reason to hire a tax attorney is that you are in trouble with the IRS. Being audited and dealing the IRS is many people's worst nightmare. If you get in this situation, it means that your figures didn't add up and the person who has prepared your original tax filings has at the least made an error or at worst was completely incompetent. By hiring an attorney, he/she will be able to give you the best legal ways of working with the IRS so you can come to a mutually agreed upon conclusion.

Another reason to hire a tax attorney is they understand that the tax laws are not just black and white. There are many shades of gray between the two. He/she can give you many different legal ways to solve the problem and get the IRS of your back.

He/she will also act as a go between you and the IRS. Everyone knows the intimidation tactics the IRS will use to try and get you to cooperate. A good lawyer understands these tactics and how to "fight" them on good legal reasoning. He/she is on your side and basically; he/she will fight your battles for you.

If you owe a significant amount of money in back taxes hiring a tax attorney is your best option. People who try to take on the IRS alone usually end up paying more than those who are legally represented. With attorney-client privilege, you will be able to honestly talk to your attorney about exactly what went wrong so they can find the absolute best options for you. He/she knows the tax law inside and out and can come up with a solution for both the short term and the long term. You cannot underestimate the bully tactics of the IRS. If you ignore them, they will pursue you even more aggressively.

If you own a business or have a larger estate, you should also consider consulting with a tax attorney. He/she will make sure all your assets are set up according to the required tax laws. This can save you thousands of dollars in tax deductions and give you the peace of mind that everything you are doing is above reproach.

Referral groups can prove to be invaluable for many small businesses and small business owners.

In Private Letter Ruling 200709070 the IRS recently held that Exceptional Organizations, a standard referrals/leads group, did not qualify as a tax exempt “business league.” This ruling presents a good opportunity to review a few of the requirements to qualify as a tax-exempt “business league.”

A “business league” is an association of persons having a common business interest, whose purpose is to promote the common business interest and not to engage in a regular business of a kind ordinarily carried on for profit. Its activities are directed to the improvement of business conditions of one or more lines of business rather than the performance of particular services for individual persons.

The Treasury Regulations set out the following specific requirements:

1. It must be an association of persons having some common business interest and its purpose must be to promote this common business interest;
2. It must be a membership organization and have a meaningful extent of membership support;
3. It must not be organized for profit;
4. No part of its net earnings may inure to the benefit of any private shareholder or individual;
5. Its activities must be directed to the improvement of business conditions of one or more lines of business as distinguished from the performance of particular services for individual persons;
6. Its primary activity does not consist of performing particular services for individual persons; and
7. Its purpose must not be to engage in a regular business of a kind ordinarily carried on for profit, even if the business is operated on a cooperative basis or produces only sufficient income to be self-sustaining.

According to the IRS, Exceptional Organizations referral group did not qualify as a “business league” because its activities did not improve the business conditions of one or more businesses, its primary activities consisted of providing services for particular persons, and it was engaged in a regular business of a kind ordinary carried on for profit.

There are three types of tax that you will be responsible for when you start your eBay business. They are 1) sales and use tax, 2) payroll tax and 3) income tax.

Sales and use tax - Just about every state, and many cities and other local authorities, imposes a sales tax on items sold. Each state has different rules, so it's important to find out the rules in your state and city. As a seller, you are responsible for collecting and remitting the proper sales tax to the state you live in. You are also responsible for preparing and submitting a report detailing the amount of your sales and the sales tax collected.

You may also be subject to use taxes. This is taxes on goods you purchased out of state that you did not pay sales taxes on. The use tax generally applies to items purchased out of state which would have been subject to sales tax if the purchase transaction had taken place in state. The use tax came about from the concern that purchasers could avoid paying a state's sales tax by making their purchases outside the state.

Payroll tax - The second type of tax that you are responsible for as an eBay seller is payroll tax. If you hire employees to help you with your eBay business, you are required to withhold federal income taxes, Social Security and Medicare taxes, and state income taxes. These taxes must be submitted to the proper tax authorities on a periodic basis (usually quarterly). In addition you must pay unemployment insurance and workers' compensation on all employees.

If you operate your business as an S or C Corporation, you will need to setup payroll for yourself, and remit payroll taxes on your own salary. If you operate as a Sole Proprietorship, you pay self employment tax instead of payroll tax.

Income tax - The final type of tax is the income tax. No matter how your business is structured, you will be required to pay income tax on the business' net profit.

Sole Proprietors pay income tax on their personal income tax return (Form 1040). Your business profit is calculated using Schedule C – Profit or Loss From Business, and your profit is added to your other income to determine your tax liability.

S Corporations file Form 1120S to report the business profit or loss. A Schedule K-1 is then prepared, which shows each shareholder's share of the net profit or loss that needs to be declared on their personal tax return.

C Corporations file Form 1120 to both report the business net profit and to calculate the resulting income tax.

Depending on the state you do business in, you may also be subject to state income taxes on your business profits. The state level taxes are often referred to as franchise taxes.

One of the great steps your wholesale business portfolio can suffer or pass with greater ease is the Uncle Sam month- April month. For this exceptional month when you are a retailer or a wholesale distributor situation can get complicated or very simple.

If you own an e-commerce store on the Internet selling hundreds and thousands of items a year without being incorporated with the many options you have as a business owner, could be financial suicide. Whether you sell DVDs, video games accessories, or drop ship Audio merchandise on a yearly if you do not incorporate your e-commerce store you risk having to pay thousands of dollars at the regular maximum rate for taxes in the USA or in your country of residence.

Not only that if you are not incorporated as a C-corporation, S-corporation or as an Limited Liability Corporation known as the famous and simple LLC- the possibilities of having to pay the likely 40-50% cut to Mr. Uncle Sam every April of every year are not possible, are empirical. Total scrutiny if you ask many business owners that have seen the difference in tax cuts and are successfully with there fully worked incorporation.

Having it as a wake-up call note, the financial risk you are having for not protecting your business and personal assets can be very, very damaging to your pocket. Whether you are making $500 a year or $140,000 plus a year in sales, it will be advisable for you to incorporate. Protection, huge savings and tax cut from the many loopholes the government already offers you, are gigantic- consult with your accountant or nearest advisor for getting the facts for your retail, wholesale distributor business or any other business endeavor you have already started.

Giving you a fast early bird example- lets say that you sell eBay items and that you are also a consultant for your niche or sub-niche businesses. At least here at Puerto Rico and potentially, at many US states- in those famous tax forms, you can deduct many of your expenses like food, gas tank, restaurant dinners while still getting to put your car monthly expenses and even house as tax deductible. Best of all, your deductions will not suffer or be deducted from your years growth income.

Your income stays high, your growth income is counted and the possibility of paying the average 40-50% rate in April decreases greatly. You will have to consult with your tax advisor about the great positive loopholes that the US government has given for the incorporated. With a great educated and knowledgeable wholesale business accountant, taking advantage of these tax loopholes whether you are a retailer or wholesale distributor could mean the difference between a brand new car being fully paid with such savings or a Subway chicken soup savings. Decide early!

For all the complaining about taxes, it is rather amazing that taxpayers leave so much money on the table each year. The IRS recently announced that 2.2 billion dollars in refunds are about to expire unclaimed.

April 17, 2007 represents Christmas for the federal government. Why? If 1.8 million Americans don’t wake up, the federal government will get a gift of 2.2 billion dollars. How would you like to find that under the tree!

The 2.2 billion dollars is a 2003 issue. Specifically, taxpayers failed to claim the money in the form of tax refunds for the 2003 tax filing period. How many taxpayers? About 1.8 million. This equates to an average refund of $1,222. Obviously, some are smaller and others bigger, but it is a nice chunk of change.

Given the amount of the tax refund pool, one might wonder how so many people could have failed to claim their refunds. The answer can be found in a couple of areas.

1. People who failed to file returns because they didn’t earn a lot.

2. People who switched jobs and didn’t calculate the taxes paid by both employers.

3. People who moved and didn’t tell the IRS. Tax refunds are not forwarded in the mail.

4. People who can claim the earned income tax credit.

5. Self-employed people who overpaid certain quarterly taxes.

So, why is there a deadline to file for the refunds? Tax law is such that you have three years to look back in time on tax issues. As a result, the April 17th deadline is three years from April 15th 2004, the date you should have filed a tax return for your 2003 taxes. The extra two days have to do with the fact the 15th is a Saturday this year.

If you complain about your taxes, you should go back and check your 2003 return. If you are due a refund and let it expire, you have nobody to blame but yourself. Just think, you could apply it to the amount you owe this year!