‘A business owner gets $1,164 back from DIY tax return error.’
Confusion over a retirement account deduction resulted in a small error, but every dollar paid to the IRS is a dollar that can't go toward business expansion.
1 min read

Money Found

23 December 2023

A business owner gets $1,164 back from DIY tax return error.

Angie M Grainger

It wasn't in reviewing the tax return that we caught this mistake—it was when thoroughly reviewing the accounting, discovering some inconsistencies, that triggered us to investigate further.

This business owner had been doing their own tax returns and accounting, but once they grew to seven-figures they were concerned they might need to get some experts involved. The value in doing this was clear sooner than they could have imagined!

The first thing we did was get their accounting cleaned up so we could do a really good tax projection. Once we could see the numbers, we saw a SEP-IRA contribution expense of $61,000 posted and paid in March.

But when we confirmed this amount to what was reported on the prior tax return, we noticed a very common mistake…

For SEP-IRA plans, you can make a contribution anytime before you file your tax return. This means you can basically deduct the contribution you paid in this year—on last year's return!

The error we found was that the prior year amount of $58,000 was deducted instead of the $61,000 that was paid in March. By amending the return, this business owner will get a refund of approximately $1,100.

That $1,100 could buy a new computer, pay a bonus, buy more inventory… or anything else that could expand the business, rather than letting the IRS have it—every dollar counts!

The cleaner your books are, the more money you will find… and keep!

Why settle for anything less than your own, personal CPA firm?

Why settle for anything less than your own, personal CPA firm?

Our team of Certified Public Accountants, Personal Financial Specialists, and Certified Financial Planners® is dedicated to personal finance—so we’re dedicated to you.

Our team of Certified Public Accountants, Personal Financial Specialists, and Certified Financial Planners® is dedicated to personal finance—so we’re dedicated to you.

Prosper-ent

one who prospers.

Prosper-ent

one who prospers.