Tax time

Tax season doesn't have to be a period of dread for individuals or businesses, but all too frequently it is.
Jame Heuman, associate director of the Small Business Development Center at the University of Texas of the Permian Basin, said plenty of assistance is available if business owners will simply open their eyes.

"There's a lot of help out there," Heuman said. "When you mention taxation, people cringe. But all there is to an audit is it's a check to make sure you're doing things right.

"I've seen a lot of IRS audits where the IRS left writing them a check," he said.

Every business owner in the Permian Basin would do well to heed the advice of the professionals at UTPB's SBDC.
At its seminars, the SBDC encourages individuals starting a new business to follow a simple procedure to ensure they're prepared to deal with taxation properly.

"My suggestion is find an accountant first and set your books up as your accountant wants it," Heuman said.

While a bookkeeper is good for taking care of a business's daily demands, he said, an accountant will keep up with changes in laws that may affect a business. Using the services of a certified public accountant will ensure that changes in the law are observed because CPAs are licensed by the state and must keep their knowledge of the tax laws current.

"We certainly agree that a small business should start out with a reputable accounting firm," said Bill Elms, a partner in the Odessa accounting firm of Elms, Faris & Co.

However, if that business only involves a single employee as in the instance of a contract welder and no other issues are involved, Elms said utilizing an income tax service like H&R Block would be acceptable as a way to save money.

"But if you're any size at all, we would recommend using a CPA," Elms said. He noted that Elms, Faris & Co. will even help in preparation of business plans.

The seminars offered by UTPB's Small Business Development Center are very useful in understanding the operation of a business, said Hilda Rodriquez of Balmorhea.

She and her husband,  Joe Abel Rodriquez, reopened the grocery store in Saragosa in November 2007. That store had been damaged in the tornado that hit Saragosa in 1987. It was reopened by Rosalio Candela but closed again in 2004 when he died, Rodriquez said.

"It was the first time I ever opened a business, and I didn't know anything about running a business," she said. "I had always been in nursing."

In January, Rodriquez attended a seminar presented by the SBDC. It proved to be an eye-opening experience.
"I feel more comfortable now," she said. "The seminar was very useful. I even learned that water is exempt from tax."

Tommy Baker, director of the UTPB SBDC, said the local center typically arranges with representatives of the Texas Comptroller's Office to present its taxation seminars.

Heuman said the two top versions of accounting software recommended by the SBDC to small business owners are Quickbooks and Peachtree. A business owner who consults with a CPA and then uses one of those programs will essentially be able to have all the documentation needed for their business.

Even with that, however, Heuman said, many aspects of taxation "are a gray area" that necessitates the involvement of a CPA.

He cites the importance of business owners becoming familiar with the Internal Revenue Service's booklet.
"The IRS's website is very solid as far as information is concerned," he said.

As a last recommendation, Heuman tells business owners to take their business records to the taxman on a computer disc.

"It's better to take them in on a disc rather than in a shoebox," he said.