Tax deductions: There's still time for small business

Tax deductions for retirement savings are still available through April 17. File an extension to get more time to qualify for tax deductions.?

Many small business owners looking for tax deductions for 2011 still have time.

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Tax?returns for 2011 are due next week, but the Internal Revenue Service has liberal deadlines for contributions to many retirement plans. A contribution for the prior year must be made by the due date, Tuesday, April 17.

You can get even more time if you're planning to file for an extension. In that case, you have to make the contribution by Oct. 15 and you don't have to pay a penalty or extra?tax. Many small business owners get extensions routinely so they have more time to make their retirement plan contributions.

You get the extra breathing room if your plan is a SEP, or Simplified Employee Pension; a SIMPLE, or Simplified Employee Pension; or a plan like a 401(k).

There's more. If you don't have a SEP, you can create one by April 17 or Oct. 15, and get the?deduction?for 2011. SEPs are the simplest retirement plans to set up. There's little paperwork and you don't have to file any documents with the IRS.

The?tax?agency explains what you need to do to set up a retirement plan on its website,?www.irs.gov?. Search for Publication 560, titled "Retirement Plans for Small Business."

It's a good idea to check with a certified public accountant before setting up any retirement plan. If you have a benefits or human resources consultant, they can also help you.

TAX?PAYMENT TIPS

Small business owners who haven't filed their 2011 returns yet may be trying to decide how to pay their taxes. If cash is short, credit cards are an option ? but make sure that you use the card that has the lowest interest rate. You can also use more than one card to pay your?tax.

The IRS website has directions for paying your?tax?by credit card. Visit?www.irs.gov/e-pay?. The same page has instructions for paying your funds by an electronic withdrawal from a bank account.

If you're thinking of getting an extension of the filing deadline, remember that you still have to estimate how much?tax?you owe and pay it. If you can't pay your?tax?right now, you can request an extension of the deadline to pay, or an installment payment plan. You can get more information by downloading these publications and forms from the IRS website:

?Instructions for Form 1040.

?Form 4868, "Application for Automatic Extension of Time to File U.S. Individual Income?Tax?Return."

?Form 1127, "Application for Extension of Time for Payment of?Tax?Due to Undue Hardship."

?Instructions for Form 9465, "Installment Agreement Request."

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