Facing a difficult economy and new tax changes, many small business owners will need to be especially alert to pitfalls and opportunities this tax season, according to Moore Stephens North America Inc., which represents 125 offices in North America and $1 billion in annual revenue.

CPAs at member firms from Moore Stephens North America offered these tips for small business owners:

1. Don't procrastinate. "Many companies are probably more worried about the economy than about their taxes right now, but that could be a mistake. As bad as the economy is, you need to know your options before it's time to pay your taxes. Even if you had a bad year, you may owe taxes (surprise!) or you could get significant refunds of much-needed cash from net operating losses. So don't avoid your accountant," said Larry McKoy, CPA/PFS, Senior Tax Partner at Goodman & Company in Richmond, Virginia.

2. Take advantage of the new rules for business losses. "Small business owners need to plan for their net operating losses (NOLs). An election must be made at the time the 2009 tax return is filed to either carryback or carryforward the current year NOL. The taxpayer needs to look at the tax rates and income levels in the prior years. If they were not substantial and income is expected to increase in the future, it may be better to carry the loss forward," said Stacey J. Dell, CPA, Tax Partner at Mohler, Nixon & Williams in Campbell, Calif.

3. Depreciation is your friend. "Be sure to maximize the depreciation deductions available by using the Section 179 immediate deduction of certain fixed assets and the 50 percent bonus depreciation for purchasing new assets," said Claude A. Titche III, CPA, Tax Partner at Beene Garter in Grand Rapids, Mich. "Quicker depreciation expenses save tax dollars for other important purposes. Remember that you only get to deduct the cost once. A current deduction is better than a deferred deduction."

4. Watch out for surprises from out of state. "Small business owners need to review their state filing requirements for income tax, personal property or sales and use tax," advised Joel Rothenberg, CPA, Tax Partner at DiCicco Gulman and Co. in Boston. "The states are very aggressive in enforcing their laws and small business owners need not only be aware of the rules in their home state but determine whether their activities in other states trip a filing requirement."

5. Expect extensions. "As 1099 reporting is allowed to be submitted closer and closer to a tax compliance deadline, more small business owners can expect their business and individual returns to be extended. We educate our clients about the possibility of extending their returns due to the increased compression period in receiving this information so close to tax deadlines. We also assure them that there is no increased risk of their return being selected for examination by extending," said Kimberly A. Lawrence, CPA, Tax Principal at Joseph Decosimo & Company in Chattanooga, Tenn.

6. Do the opposite of what we've told you before. "This year, think about accelerating income and deferring expenses. That is the opposite of everything accountants have typically preached for many years. But this may be the time to look at IRS-approved ways of minimizing taxes through different accounting methods," advised Christopher E. Axene, CPA, Principal at Rea & Associates in Dublin, Ohio.

7. Take advantage of depressed asset values. "In light of the current economic environment, which has driven the market values of businesses downward, small business owners may want to consider transferring stock in their companies to family members as part of their total estate plan," said Vincent Paolucci, CPA, Tax Partner at Grassi & Co. in Jericho, NY.

8. Read my lips. "Tax rates will be going up," said Chris Province, CPA, Partner at Armanino McKenna in San Ramon, Calif. "Small business owners should be considering what they can do to minimize taxes now and in future years when tax rates go up."

9. The return of the C Corporation. "The prospect of increased future tax rates also calls for a determination of the most appropriate form of business operation. C corporations may make a comeback if individual tax rates are increased to 39.6 percent; if a surtax of 5.4 percent is imposed on high AGI taxpayers; or if additional Medicare taxes are imposed on high-income taxpayers," said John Smolke, CPA, Partner at Peterson Sullivan in Seattle. "Paying taxes at C corporation rates may make the most sense, especially during the years when the business needs to build up its equity."

10. Take a trip on your P&L to find hidden treasure. "There's a line on your P&L statement that has a 'hidden' deduction opportunity that could actually generate a significant tax advantage and put cash back into your pocket," said Bruce B. Zicari II, CPA, CVA, and Partner, Small Business Advisory Group, at The Bonadio Group in Pittsford, NY.

"The essence of this opportunity is that it may be possible to move certain capitalized items that are currently being written off through depreciation and reclassify them as a repair, and by doing so, change the deduction equation significantly in your favor. Instead of recognizing small amounts of depreciation every year, you get to write off the whole capitalized item this year! There are a couple of speeds bumps along the way before a business owner can realize these tax savings. The clock is ticking on the opportunity to expense these previously capitalized items. That trip from balance sheet to P&L to huge tax savings is one that's well worth taking, and you should be starting your journey now, as the IRS will most likely be closing the road in the very near future," said Zicari.