A Basic Guide to Filing Small Business Taxes
Filing small business taxes is a requirement of the country and the Internal Revenue Service. All businesses operating within the United States, including sole proprietorships, partnerships, corporations and others, must file yearly documents outlining the gross sales of the business.
Tips for Successful Filing
The income tax you file is an incredibly important part of your business. If you fail to file documentation showing your income or fail to pay taxes on it, you could see your business shut its doors due to the hefty fines and fees. Organizing and paying these taxes is necessary, but the following tips make it easier.
- Do focus on tax deductions. Most businesses qualify for a wide range of deductions, including startup expenses, business entertainment costs, business travel and car expenses.
- Do process employee data early in the year, rather than waiting until the last minute. Employees must receive a 1099 documenting income by the end of January.
- Most businesses must pay into the tax system throughout the year, not just through a onetime fee in April. Therefore, be sure you are reporting your business’s income quarterly and you are paying taxes as required.
- Do not forget about state and local taxes, too. You may need to pay these taxes throughout the year as well.
- Do document losses in the business. It could save you in taxes and helps you to ensure your business is not overpaying throughout the year.
Small businesses are necessary to keeping the country moving forward. It is critical to have as much data about this process as possible. Do not put off filing until the last day, or it can hurt.