Whether your business is made up of a single person or a few dozen, you’ll need to prepare before filing your taxes this year. At AA Tax & Accounting Services, we know how difficult this time of the year can be for small business owners, so we’ve created a simple list of things to know as you file your business taxes.
Assemble Your Records
Begin by collecting any applicable business records. This will include information such as:
- Employment forms (W-2s, 1099s, etc)
- Recorded tax deductions (advertising, phones, internet, office supplies, transportation, travel, office space costs, repairs, insurances, etc.)
- Gross receipts from sales or services
- Sales Records
- Returns and allowances
- Business account statements
- Inventory information
When you meet with your certified tax preparer, you’ll need this information to fill in the applicable fields on your tax form.
Keep Clean and Accurate Records of Your Deductions
When assembling records in preparation for file, be sure to include deductions. It’s best if you write down your deductions as you go to avoid taking too many deductions or too few when the end of the year comes around. You can receive tax credits for anything from your office space and business car to your travel expenses and insurance policies.
Remember to Pay Quarterly
It might be a little late to tell you this, but if you’re a small business owner, you should have been making estimated tax payments quarterly. If you failed to do so last year, you can still pay your taxes, but you’ll be subjected to a small fee when you file. The first quarter payment of the year is due April 15, so if you didn’t pay quarterly last year, there’s still time do so this year.
Choose Your Form
You have a couple of options for tax forms. One choice is Schedule C, which is a simple way to list expenses and calculate earnings. You can also use Form 1120, which calculates the same things, but asks for more details along the way. If you fill out Form 1120, it will be an entirely separate tax form from your personal income tax report.
You Might Not Get a Refund
If you’ve been paying estimated tax throughout the year, you might get some money back. But, depending on the revenue you generated, you might owe money when tax day comes around. Be sure that you have some cash saved up just in case.
The ultimate secret to successful tax filing is found in your preparation. If you’re ready, you’ll be able to relax, save money and time, and enjoy an all-around better tax experience.