From restaurants, to coffee shops, to construction companies and much more, tax season can be daunting for small business owners. Between receipts, expenses, and a myriad of other documents, this process can be confusing for all business owners. From cost of goods sold, to employee wages and more, here’s what you need to know when preparing to file your small business taxes.
Step 1: Determine if you’re going to do your taxes yourself or hire a professional
Some business owners are number savvy, and have no problem doing taxes on their own. Others are less numerically inclined, or are simply too busy running their business to do their own taxes as well. Either way, it’s important to determine who will be doing your taxes early on so you ensure you meet deadlines and don’t have to pay expediting fees. If you’re looking for tax accounting services in the Seattle area, we’ve got you covered.
Step 2: Get your documents in order
The first step in filing your taxes is making sure you have all of the correct documentation. This includes receipts from sales and services, sales expenses, and other expenses including advertising, office amenities, technology, travel, and depreciation. Getting these documents in order ahead of time is an easy way to be prepared to file your taxes as the deadline approaches.
Step 3: Fill out the correct forms
Different types of businesses require different types of forms. Common small business taxes include Self-Employment Tax, Estimated Tax, Income Tax, Employment Tax and Excise Tax. The IRS provides a complete list of the forms various types of businesses need in order to file their taxes.
Step 4: Know Your Deadlines!
Knowing tax deadlines is of utmost importance to avoid fines and tax evasion. In most cases, these deadlines are different from your personal taxes, so it is important to keep these dates in order. If you are concerned about missing dates, the IRS has a tool that will send you desktop and push notifications to your phone or computer to remind you of upcoming dates and deadlines.
Step 5: Keep detailed records for next year
It’s never too early to get started on taxes for next year. If you start keeping detailed and organized records of your taxes now, it will be way easier to get your documents in order for the upcoming fiscal year. Keeping detailed records of all income, spreadsheets with different sheets for each type of information, and keeping in depth records on employee payments are easy ways to get ahead on your taxes for next year.
Whatever type of business you own, it’s important to stay on top of your taxes and keep all records up to date. Incorrectly filed forms and missed tax dates can have big consequences on your company. If filing your business taxes seems overwhelming or if you simply have too much on your plate to do them yourself this year, contact Clear Accounting Solutions today to find out how we can help you file your business taxes.
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