Small business owners must always be prepared in ways that include hiring the right employees, having enough money for payroll, focusing on marketing strategies, ensuring a steady and consistent flow of inventory and … tax season.
If you’ve been alert and on the ball as a small business owner, you’ve been preparing year-round for tax season. And if that’s the case, things should go smoothly in time to meet the April 17 deadline. But, for some, that’s only wishful thinking.
Small business owners have numerous responsibilities, but sometimes things can get overlooked. Even though you may be the best car mechanic in the city or operate the neighborhood’s most popular convenience store, you still have to know everything about running a business. That includes the aspects related to business taxes.
A preparation guide for this tax season
Here is a list of things you can do while preparing your business taxes:
- Obtain the right tax forms that you need. This depends on the nature of your business. For example, if your business is a partnership, you should use Form 1065 to report expenses, income and losses. If you’re considered an S Corporation, you’ll need an 1120S document.
- Assemble all documents you will need. They would include last year’s tax return, bank and credit card statements, payroll deductions, accounting documents and partnership agreements.
- Prepare a list of income and expenses. For income, this may include sales records and gross receipts. Expenses would include employee wages, office supplies and advertising.
- Maximize your deductions. For a small business owner, this would include supplies, software and start-up costs.
- Maintain solid record keeping.
- If you are serving as your own accountant, use reliable accounting software.
- If you need more time, consider requesting an extension from the IRS.
Once you’ve filed your taxes for 2017, don’t neglect the current tax year. As you know, procrastination is never an ally. Preparing year-round will prevent any last-minute panic and give you peace of mind every tax season.