Overpaid Tax

While the public’s focus is usually on income taxes that go unpaid, countless small businesses unknowingly overpay their taxes on a yearly basis.  Fortunately, if you pay close attention to the amount of taxes that you are paying each year, there are remedies for recouping your overpaid taxes from the federal government.

How Income Taxes Become Overpaid

There are a few different ways in which income taxes can be easily overpaid.  For instance, many small businesses fail to claim legitimate tax deductions that result in a greater tax liability than necessary.  Small business owners can claim a wide variety of tax deductions, particularly for operating home offices, for paying self-employed health insurance premiums, and for using personal assets for business purposes.  As a number of small business owners try to lower their expenses by preparing their tax returns themselves, it is easy to miss deductions such as these, especially with ever-changing tax laws.

Another source of error that may result in an overpayment of taxes stems from wrong or bad advice given by a tax preparer or even the Internal Revenue Service (IRS).  Since a tax preparer may prepare hundreds of tax returns during tax season, he or she may overlook important deductions to which the small business owner is entitled.  With numerous tax returns to prepare, it is difficult to give each return the individualized attention needed to bring about the most benefits for the small business owner. 

Refund Claims for Overpaid Taxes

The easiest remedy for overpaid income taxes is to file an amended tax return.  Under the federal tax code, a taxpayer has three years from the filing date of the relevant tax return in which to file an amended return.  By filing an amended tax return within the required time period, the small business owner can recoup any refund, or additional refund, to which he or she is entitled.

However, if the small business owner does not catch the missed deductions within three years of the filing date of the tax return, there are no second chances.  The taxpayer is barred by law from recouping any tax refund once it has been more than three years since the date that the tax return was initially filed. 

How a Tax Attorney Can Help

As always, a tax attorney can be instrumental in assisting you with the recoupment of overpaid taxes from the federal government.  With the complexity of American tax laws, many of which change on almost an annual basis, it is essential to have an experienced tax attorney on your side when dealing with matters related to the tax code.