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Business Tip of the Month

Business Tip
of the Month
For the month of January 2002

Get a faster tax refund for your business

If your business overpaid its 2001 income taxes, here are three ways to get your refund on its way faster.

  • Offset the overpayment against your payroll taxes. If you made 2001 estimated tax payments, you can ask the IRS to use any overpayment to cover your company's payroll taxes. This will allow you immediate access to your overpayment instead of waiting until you file your return to receive a refund. Caution: This option is only available to businesses that have overpaid their taxes. If you redesignate your income tax payments and later end up owing tax, you could be subject to underpayment penalties.
  • File for the refund before you file your tax return. Special rules allow corporations to file a claim for a refund even before they file their income tax returns. To qualify, you must have overpaid your taxes by at least $500, and you have to wait until after your tax year ends to file a refund claim.
  • Carry back your losses to a prior year. If your business lost money last year, you have two choices when it comes to taxes. You can carry the loss back to offset income in the prior two years, in which case you'll receive a refund now. Or you can wait until a future year to use the loss. If you choose the latter, you won't receive a tax benefit until your business turns a profit, and then you'll have to wait until you file your return for that year to receive your refund.

For details or assistance with getting your refund on its way, give us a call.

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