Once again, it’s tax season. While the general public groans at the process, and then celebrates their refunds, it’s a bit different for small business owners. Whether you have employees or contractors, it can be easy to leave out key paperwork when filing your taxes. In this article, you will learn what you need to watch out for when preparing the file your taxes.
First off, you need to collect your records. Many times, merchants do not start compiling records until the week they are to meet with a tax preparer. This is a bad idea, since not all record can be obtained immediately. The best thing that you can do is to keep binders or filers updated throughout the year with everything from bills to employee records. Even if you use Excel or another system to keep spreadsheets, make sure that they are clearly titled, in order for easy location.
One of the biggest issues when doing your own small businesses taxes involves the many IRS forms. While many choose to use online software, some still prefer the “handwritten” method of filing out the forms and mailing them in. Many small business owners use Schedule C as a quick way to file business taxes, as it is only a few pages long. You also need to make sure that you have your tax forms postmarked by April 15th, in order to avoid any penalties.
A big question when it comes to filing taxes for a small business involves small business loans. While you cannot write off the loan, you might be able to write off things that the loan funded. These things include business travel, office furniture and equipment, office supplies, legal expenses, business automobile expenses, and the interest from the loan. It is always a good idea to consult with a tax professional about your small business loan and its write-off ability, but we all know that this is not always possible for struggling small businesses.
Filing your taxes is never fun, but it is especially a headache for small business owners. Many leave out important forms or information from their tax forms. Often times, merchants wait too late to file and incur penalties. While a small business loan cannot be a write-off, what it is used for can be. The same goes for merchant cash advances.
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