Dear Karen: My business received a notice saying that we owe more in taxes. How do we respond?
Answer: Don't assume that the notice is correct, said Larry M. Elkin, a CPA and president of Palisades Hudson Financial Group, a New York financial planning firm.
"Federal and state tax offices send out huge numbers of notices advising taxpayers that they owe money. Most result from simple errors the tax authorities believe you made. But if you carefully gathered your tax information and had someone competent prepare your return, there is a good chance the notice is incorrect," Elkin said.
Ask your tax preparer to investigate or check the facts yourself. If the notice is incorrect, let the authorities know promptly. And keep excellent records so you can always demonstrate that your tax return is correct and complete.
• Buying equipment without a bank loan
Dear Karen: I want to buy a $30,000 machine for my small business, but my bank turned down my loan application. Are there alternatives?
Answer: You may lease the equipment you need or find a lender that specializes in financing equipment purchases. Such asset-based lenders typically charge higher interest rates, so take your loan request to a couple of other banks first.
If you have older equipment that you could sell to raise funds for a new purchase, it may be useful to investigate websites, such as NextWorth, that offer cash in return for old electronics in good condition.
Small-business questions? Email Karen at email@example.com.