Tax preparation is either your favorite thing or your worst nightmare. You either do them as soon as you can or dread it until the last minute. If you’re one of those people that struggles during this time of year, your small business might benefit from some help.
What better way to help you stay motivated and organized throughout the process than with a checklist? After all, there’s no better feeling than crossing something off your checklist, right?
Let’s go through the various steps you should take when preparing to file your small business taxes and what you should include on your checklist.
Get the Specifics Under Control
Before you’re ready to file your taxes, you’ll need to know what form you need to fill out and most importantly when you need to have them filed by. Not only will this help you stay organized and on schedule, but it will tell you what you need to know moving forward.
When it comes to the type of form, you’ll likely need to fill out either a Schedule C form (sole-proprietorship, single-member LLC), Form 1065 & Schedule K-1 form (partnership, multi-member LLC), Form 1120 (corporation, LLC taxed as corporation), or a Form 1120-S (S Corps).
As far as the deadline, March 15th will be the target for any partnerships, multi-member LLCs, and S Corps. April 15th will be the deadline for pretty much everyone else.
Gathering What You Need
The next step will be to gather any forms, documents, and files that you’ll need for records. These will be vital to ensuring the information you provide to the IRS is accurate and correct. Having them ready will save you valuable time instead of having to look for them later.
Some of the things you’ll want to gather include: taxpayer identification number, income statements, bank statements, balance sheets, receipts, credit card statements, payroll records, and estimated tax payments. You’ll also want to make sure you have last year’s tax return handy because you’ll need to enter that as well.
Tax Deductions and Credits
One of the benefits to owning a small business is the vast array of tax deductions you can take throughout the year. Many people will be surprised by all that’s included in this. Let’s take a look at some of the more popular deductions that could save you a lot of money on your tax payment:
- Charitable donations and contributions
- Health insurance tax credit
- Disabled access credit
- Tax deductions for traveling on business
- Business mileage accrued when driving
- Tax deductions for owning a home office
- Any supplies and food money spent on employees
If you want to make sure you take full advantage of the various tax credits and deductions offered in your state, a certified public accountant can be a valuable addition to your team. They will keep you on schedule and ensure you are set up to succeed with as little a payment as possible. Not to mention, they will take all the stress out of the equation for you.
If you’re looking to make tax season the easiest season of all for you and your business, contact me today and I’ll be happy to assist you.