Preparing Taxes for Your Small Business

Preparing Taxes for Your Small Business

Taxes are an inevitable part of running any business and, as a small business owner, you may find yourself with questions regarding your business’s tax filing. Knowing how to prepare in advance of your tax filing day can ensure you have the proper documentation and save you a lot of stress. Some common questions small business owners should ask before preparing taxes are:

Which Forms Do I Need?

What Other Information Should I Collect?

To file Schedule C, make sure you also come prepared with your information regarding cost of goods sold. In addition, you’ll need receipts for all deductions, such as travel, hotels, mileage, and meals. You should gather information for assets purchased for business purposes, as well as the amount of any depreciation. Finally, if you operate your business out of your home, collect receipts for any expenses to that end, such as office furniture, internet, or phone bills.

Corporations should include income information like gross receipts, costs of goods sold, capital gains, dividends, rent and interests. Deductions include the usual travel, meal, and transportation expenses as well as business supplies, legal fees, startup costs, salaries, maintenance, taxes, licenses, and many others. Finally, taxable income and tax from a schedule, fewer payments made and credits earned, are calculated. This is not a complete list, so refer to the 1120 or 1120S for a more comprehensive list of what information you need.

Partnerships or multiple member LLCs should gather beginning of year and end of year balance sheets, profit and loss calculations, and a calculation of the cost of goods sold. In addition, you should prove any deductions such as travel, hotels and mileage with receipts, along with any assets purchased and their depreciation, such as vehicles or equipment. Finally, partnerships must pay state partnership taxes, so check the laws in your state.

What Are My Tax Filing Dates?

  • Those filing Schedule C taxes will do so along with personal income taxes, on April 15th. If April 15th falls on a weekend, use the next business day.

  • Partnerships or multiple-member LLCs filing partnership taxes must do so on or before March 15th. If March 15th falls on a weekend, taxes are due on the next business day.

  • Corporations and S corporation taxes are due, dependent on the corporation’s fiscal year-end. For corporations with years ending December 31st, tax returns are due April 15th, or if the date falls on a weekend, the next business day. For corporations with fiscal years ending on any other date, tax returns are due on the 15th day of the 4th month after the fiscal year-end.

Filing taxes can be complicated, even for seemingly simple Schedule C returns. To ensure accuracy and make sure you’re finding all your potential deductions, consider using a professional tax preparer. Diversified Management has a wealth of tax tips and other business planning information. Reach out via our online form or call for a free consultation today.

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