Owe the IRS more in tax than expected? These are the next steps for business owners

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As the U.S. continues to emerge from the pandemic, certain businesses might be seeing improved revenue and owe more taxes than they have in the past few years.

Small business owners facing a big tax bill should have filed their taxes or, in the least, for an extension.

Tax law changes in 2022 are also causing somein the small business world. Meanwhile, newly self-employed often mistakenly equate gross pay and net pay, without taking taxes into account. "If you've been living as if the money that's in your bank account is your net pay, that can be a rude awakening," said Andy Phillips, director at The Tax Institute at H&R Block.

specifically dedicated to this topic. "It's a tremendous relief for those that are impacted," said Michael Prinzo, managing principal of tax with CliftonLarsonAllen in Greenwood Village, Colorado.Owners who need more time to pay may qualify for a short-term or long-term payment plan. They can visit the relevant section of theOwners should keep in mind the IRS's "Failure to Pay" penalty based on how long their overdue taxes remain unpaid.

In addition, there may be additional opportunities to deduct expenses, such as software, advertising or certain professional service fees, Phillips said. Small business owners may also be able to deduct home office expenses, if applicable.

 

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