May 2021 Q and A

QUESTION:

I recently moved. How do I notify the IRS of my new address?

ANSWER:

You will need to officially notify them of your new address. Changing your address with the post office won’t cut it. You can accomplish this in a few different ways. First, you can complete Form 8822, the change of address form, or write a letter. If your address changes before filing your tax return, you can simply use your new address on your return and the IRS will make the update for you.

QUESTION:

Does providing my customers with an early payment discount make sense for my new business?

ANSWER:

Start with asking yourself do you need to have customers pay faster because you need the cash? If you’re in a pinch to make payroll or pay rent, then it might make sense. But remember that offering a discount cuts into your profit margin. So ensure your business can afford it. And just because you provide an early payment discount to speed up cash flow doesn’t mean your customers will take it. Be sure to have a backup plan to meet any short-term cash flow needs.

QUESTION:

How long should I keep my tax records?

ANSWER:

Generally, three years, but up to seven if you’re self employed or reported losses.