For your business priorities, every minute spent on tax preparation is a minute, less spent working. Everyone likes not having to do their taxes. It makes it critical for small business owners to be as well-organized as possible when they start doing their tax prep. If you will get everything because of your small business strategies, it’s very tough to find the time to manage your books, hire the right workers, and oversee the daily challenges of your company. When tax season comes around, this can present a lot of problems. You can comply with the necessary steps to your small business Tax preparation checklist and following it step by step. Because of this procedure, you’ll be able to ensure that you take care of every task and wants to do it without running any rules and regulations from the IRS or state tax authorities. There are different types of tax preparation checklists.
- Understand the types of business taxes
- Choose the appropriate tax forms
- Maintain and create a tax calendar
- Gather essential business tax return documentation
- Research tax deductions and credits
Understand the types of business taxes
Small businesses are required to pay certain taxes to the IRS and state tax establishments. When you start some small business strategies as a business owner, it is your responsibility to ensure that your federal and state tax requirements are met by nobody else’s. Though you run a sole proprietorship, S corporation, or C corporation, these are some main types of taxes your small business maybe you are responsible for this.
- Income Tax
- Estimated Tax
- Self-employment Tax
- Employment Tax
These taxes are based on the income produced by a business and are paid on both a federal and state level. It all depends on your entity business is considered as-also known as your small business structure- and that’s why your small business tax responsibilities are varied.
Estimated taxes are the payments businesses are required to make after six months. Estimated taxes are due April 15, June 15, September 15, and January 15, or the next days may be coming on weekends or holidays.
Self-employment tax, you will have well-thought-out a worker at your company. If you earned more than the amount from business activities, it should be noticed as income or paid at the self-employ rate tax.
If you have workers, also you have a lot of employment tax duties, as known as payroll taxes. Employment tax including public safety and Medicare taxes, Central and state income tax withholding, Tax preparation, or federal being without a job tax.
Choose the Appropriate Tax Forms
It’s depending on your business structure you may need to report incomes, losses, interpretations, and credit to the IRS and also may need specific tax forms- from 1099-MISC, from 1120, etc. There are some of the generally used IRS forms used to report small business taxes including.
- Schedule C:
- Schedule K-1:
- Form 1120:
- Form 1120-S:
Maintain and create Tax calendar
As a small business owner, you get everything on your hand, it’s understandable that tax due dates might not be top of mind. On the other hand, you must keep right on the payments that are due and when taxes need to be filed. The IRS doesn’t take delay or failure to pay lightly. Accounting and Tax both maintain a calendar and holds all books.
Gather essential business tax return documentation
Small business needs filing taxes of paperwork, and figuring out which forms to complete or documentation to supply can be intimidating. If you use a small tax preparation checklist to compile all the essentials, nonmatter you’re undertaking your tax preparation on your own or recruiting the services of a professional tax preparer.
Research tax deductions and credits
Tax deductions and credits are good opportunities to reduce your small business tax bill. When you researching the deductions and credits that might be applied to your business so, it’s an important step on your small business tax preparation checklist, because of this do your due diligence.
- Home office expenses
- Advertising expenses
- Healthcare expenses
- Asset depreciation
- Travel expenses