How To File Your Business Taxes

Oct 20

Introduction

If you run a small business, you know that taxes aren't fun. But they're also unavoidable if you want to keep your company afloat—and stay out of jail. That's why it's important to learn how to file your business taxes, even if it's not something you've done before.

Get a Free Quote Today! Click here

Know the deadline.

To file your taxes, you need to know the deadline. The IRS gives you 180 days after the end of the year to file your business tax return if you're a sole proprietor or if you're an LLC that has elected to be treated as a C corporation. For instance, if your calendar year ends on December 31st and you file online using software like QuickBooks, then your deadline is April 15th.

If you're filing as an individual (sole proprietor) or as a partnership with one partner (a general partnership), then there are two different deadlines to meet: One for filing and one for paying taxes.

If you're self-employed (a sole proprietor), then here’s what we recommend: File on time by registering for an EIN and completing Form 1040, and use our free tax guide.

Know your forms.

You'll need to know what forms are required for your business, and how to find them. Each type of tax filing has its own set of forms that can be found on the IRS website or a tax preparation software like TurboTax or H&R Block. Some examples of common business taxes include:

Business Income Tax - Form 1040
Employment Taxes - Form 941, Form 940 (if you have employees), W-2s, etc.
Sales & Use Tax - Form 720/722/3/A

Acknowledge your mistakes.

If you're like most new business owners, you'll make mistakes along the way. That's OK! As long as you learn from them and don't repeat them, it's all good. Sometimes, though, people can be so busy worrying about the next mistake they may make that they forget to acknowledge mistakes that have already been made.

This is why it's important to acknowledge your mistakes—you want to know when things are going wrong before they get worse and more expensive for yourself than necessary. If you're not acknowledging your mistakes as soon as possible, how will anyone else know what needs fixing? And how will anyone fix anything if no one knows about it?

It can be tempting to try and hide or ignore a mistake instead of facing up to it head-on and owning up to your own shortcomings; however, this only makes matters worse in the long run because then there are even more problems on top of those first ones left unaddressed or ignored altogether (like interest payments).

Be prepared for taxes once a quarter.

You're in luck if you are filing quarterly taxes. You might not even know it, but most businesses have to file quarterly taxes with the IRS. Quarterly taxes are due on the same day of the month as your business's fiscal year, which means that if your accounting year ends on December 31st and you didn't do anything different from last year, then you'll owe your first quarter taxes by April 15th of each year.

The good news is that there are two options for paying quarterly taxes: full payment or installments (payment in three parts). So don't worry about how much money was earned during a given period; just make sure that when it comes time for quarterly tax payments, you've got enough cash on hand to cover them all at once or pay what must be paid upfront before moving forward with installment payments.

Outsource your taxes if you can't handle them.

You can hire a tax preparer to do your taxes. This is probably one of the most popular options, and it's a good idea if you're not used to doing your own taxes. Tax professionals have the experience, knowledge, and resources needed to complete your taxes correctly and on time.
If you want more personal attention, look into hiring an accountant instead of a tax preparer. Accountants are trained in all aspects of finances—not just taxes—and they may be able to offer better advice on how to reduce your overall tax burden while still staying compliant with the law.
You can also outsource this entire process by using an online service like H&R Block or TurboTax (which also has desktop software available). These services will file your returns for you at no additional cost after talking through all the details about what kind of deductions you qualify for and what forms are required for each deduction type.*

Taxes aren't fun, especially if you're running a small business, but you have to do them anyway.

You don't have to like paying taxes, but you probably should. Taxes are a fact of life, and if you're running a business, it's likely that you'll have to pay them at some point. There are two main types of tax: income and payroll. Income taxes are paid on your profits from selling goods or services—and employees' salaries count as income for the employee. Payroll taxes include things like Social Security and Medicare contributions, which go directly into the government's coffers so they can pay for public services like schools and roads (among other things).

Conclusion

If you're running a small business, chances are you've had to file taxes at some point. The good news is that there are tax filing services available to help you with the process and make it as easy as possible. The bad news is that even if you use one of these services, the process can still be complicated and time-consuming without proper preparation beforehand. We hope this article has given our readers some insight into how best to prepare yourself for your upcoming taxes so you don't end up in trouble with your accountant or worse yet...the IRS!