Hang 1040!

Entrepreneur, Dec, 2000 by Joan Szabo

Surfing the Net for the newest tax info

Now that the Internet occupies a major role in today's business world, it's not surprising that the latest tax developments are just a mouse click away. Many tax sites are especially useful to entrepreneurs looking for tax compliance and planning data.

While tax sites are plentiful, it's important to keep in mind that the information you find on them is only as reliable as the sources it comes from. Make sure you know as much as possible about a site's owners, their credentials, and how long they've been providing tax information before you do something drastic like change your accounting system on their advice. Steer clear of Web sites sponsored by tax protest groups because they often advocate tax positions that are overly aggressive and, in some cases, frivolous, says Dennis Schmidt, a University of Northern Iowa accounting professor who does an outstanding job with his Tax and Accounting Sites Directory. (See below.)

Also make sure the information you use is current. Some sites may have outdated tax data, which could eventually lead to trouble with the IRS. Look for dates on the information posted, and go to the site regularly to determine how frequently it updates its data.

Keep in mind that the tax information you get from the Internet is "raw data," proclaims partner Ward Bukofsky with the Beverly Hills, California, accounting firm Moss Adams. It does not provide "coordinated or comprehensive tax consulting, nor does it apply all the data to a particular taxpayer's situation and weigh all the different considerations," says Bukofsky.

Schmidt concurs and warns that before you make any decision or take any action based on tax information you discover on the Internet, you should always consult a qualified, professional advisor who understands your particular business well. Many Web sites themselves point out that the information they provide is by no means a substitute for professional tax services and counseling.

We recently reviewed a number of tax sites and found the following to be among the better ones for entrepreneurs:

Tax and Accounting Sites Directory (www.taxsites.com): This directory site serves as an index to numerous tax and accounting sites on the Web. Maintained by Schmidt, it's designed to be a starting point to use when searching for tax and accounting information and services. It offers a subject-specific directory, and topics run the gamut from federal tax law to policy and reform. A click on "Tax Topics" provides a list of tax sites, including a link called "Small Business Taxation," which offers very useful tax information geared toward small and midsized businesses.

Tax Resources on the Web (http://pages.pro digy.net/agkalman): Finance executive Alan G. Kalman organizes his directory of direct links alphabetically by tax subject. The site is designed to serve as a portal for individuals and small-business taxpayers wishing to gain easy access to the tax assistance and resources available on the Internet. One of the links, "Business Entities," provides a number of topics for business taxpayers, including "Tax Aspects of Selling Your Business," as well as "Starting a Business and Keeping Records."

Internal Revenue Service (www.irs.gov): The IRS' Web Site is chock-full of tax information, forms and publications. Once you're at the site, click on "Tax Info for Business," which appears at the bottom of the page, then proceed to "Small Business Corner" for tax data affecting entrepreneurial companies. You can also check out the "Internal Revenue Bulletins" section, which provides you with the most recent IRS rulings. The agency's Market Segment Specialization Program Audit Techniques Guides are also available from this site.

Quicken.Com Taxes (www.quicken.com/small_business/taxes_and_accounting): This well-organized and graphically attractive site includes a good deal of tax information particularly useful for entrepreneurs. A sample of the information available includes payroll, federal, sales and state tax obligations. A section labeled "Answers to Your Questions" provides help on doing your books. Links to tax and accounting Web sites are also offered.

Small Business Taxes & Management (www.smbiz.com): One of the best sites for those entrepreneurs looking for in-depth tax information, it includes updates of federal rules, summaries of revenue rulings and procedures, and small-business links. Small Business Taxes & Management has been providing tax and management guidance to small and midsized businesses since 1980. The site is updated daily, Monday through Friday.

Gary Klott's Tax Planet (www.taxplanet.com): Tax Planet is not just for business owners, but it does include many articles entrepreneurs will find useful, such as information on Roth IRA conversions, travel expenses, home offices and charitable contributions. Launched in February, the site is edited by Gary Klott, a syndicated tax columnist and former New York Times writer. Article summaries are well displayed and come with links to the full text.