IRS Launches Campaign To Help New Small Businesses

by Mike Godfrey, for LawAndTax-News.com, Washington

24 April 2008

The US Internal Revenue Service (IRS) this week launched a campaign to help educate new self-employed small business owners about federal tax responsibilities.

The campaign kick-off coincided with the Small Business Administration’s annual Small Business Week, held between 21st-25th April, which recognizes outstanding small business owners for their contributions to the nation's economy and for their personal achievements.

“One of the biggest challenges faced by people starting out in business is understanding and meeting their tax filing requirements,” observed Kathy Petronchak, commissioner of the IRS’s Small Business/Self-Employed operating division.

“It’s a new, different and potentially overwhelming experience for them. We want new small business owners to know that the IRS has resources to help them learn about their federal tax responsibilities and avoid common pitfalls,” she added.

The campaign will provide new Schedule C, Profit or Loss from Business, filers with improved and updated educational materials through a variety of channels.

Schedule C is filed by sole proprietors (one-owner businesses) as an attachment to their Form 1040 individual income tax return. Self-employed individuals with less complex situations – including business expenses of less than USD5,000, no net losses and no employees – may be able to file Schedule C-EZ, Net Profit for Business.

About one in seven federal income tax returns includes a Schedule C or Schedule C-EZ. Taxpayers filed over 21 million Schedules C for tax year 2006, reporting overall net profits from sole proprietorships totaling more than USD269bn.

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