NH Small Businesses Warned about Relying on Tax Software

The State of New Hampshire Department of Revenue is now warning small business users who rely on tax software to prepare their state Business Profits Tax Returns (BPT) and state Business Enterprise Tax Returns (BET)  that they may not necessarily be right.

In Technical Information Release 2010-12, the state, as part of an overall explanation on major changes related to the decoupling of the BPT from the BET that:

The Department recognizes and appreciates the value and convenience that automated tax preparation software provides to its customers. But, the Department cautions taxpayers and tax preparers not to rely entirely on the software or its underlying form logic, without independent verification. Inaccurate software calculations may result in incomplete or unsubstantiated results. It is imperative that any and all amounts reported on a taxpayer's return be substantiated, regardless of the tax preparation software program calculations. Since programming specifications and computer-generated instructions are not submitted to the Department nor certified for accuracy, independent verification is strongly advised

In English, this means that just because the computer did it, does not mean it's right. If you don't understand how New Hampshire's business tax system works, then you should have someone who does understand the system review what you're produced.

Do you understand the Business Profits Tax? How about the Business Enterprise Tax, and how this can reduce your Business Profits Tax?  Do you understand how the Business Enterprise Tax is really a disguised payroll tax, but one that NO payroll service will take off for you? If you're an LLC member operating as a sole proprietor or partnership, do you understand what reasonable compensation is as well as all the new rules associated with it?

New Hampshire is only one of 50 states, so most tax software vendors don't commit a lot of resources to making sure they are doing it right. Ultimately, it falls on the taxpayer to submit a proper tax return.

Steven A Feinberg, CPA of Appletree Business Services LLC, is a PASBA member accountant, located in Londonderry. Feinberg has more than 25 years experience in federal and state issues. He specializes in small business, general, tax and payroll matters. For additional information on these and other current business and tax issues, email Steve at info@appletreebusiness.com or call (603) 434-2775.

Steven A. Feinberg www.AppletreeBusiness.com Get Appletree Blog via Email!