Tax Season is here and if it’s your company’s first year in business you might have a few questions regarding how to file your first tax return as a small business owner. Businesses have a few more steps and regulations they need to adhere to when filing a tax return. Check out tips on how to prepare for business tax season.
Checklist for Business Tax Season
Beware of Tax Due Dates
If you’re a business owner, independent contractor, or self-employed, the IRS requires that you submit four quarterly business tax payments throughout the year. Many small business owners pay estimated taxes since they don’t earn a salary and taxes aren’t taken out from their income. It’s important to be aware of the due dates for each payment, so your business doesn’t miss tax deadlines and get hit with late penalty fees.
Pay Self-Employment Taxes
Small business owners have to pay self-employment taxes for the net income of their businesses. If there isn’t any income from your business or if the income is $400 or less for the year, you aren’t required by the IRS to pay the self-employment tax. Make sure to calculate these taxes as part of your total estimated taxes when paying quarterly estimates.
Home Office Deduction
If your business is a home-based office, you can deduct a portion of your residence as a business tax deduction. To properly account for the business’ use of the home, a business owner needs to deduct the percentage of the real estate taxes and mortgage interest that would be taken as an itemized deduction. If you still have profits remaining, other home expenses like home repairs and landscaping can be used for the business portion for deductions.
Keep Track of Automobile Expenses
Having automobile expenses can be a big deduction for new and existing businesses. The business tax returns will want to know when the vehicle was in service, commuting, and personal miles for each vehicle. A business owner should track:
- Automobile expenses
- Where and when the travel occurred
- Whether there was a business purpose to the trip
Hire a Tax Professional
A tax preparer wants the best for your business and for you to save as much money as possible. They will work with your small business and make sure all tax forms are in order and submitted on time.
As a small business owner, you have a lot of responsibilities, and making sure to fill out your business tax forms on time and correctly can be stressful. The accounting team at Satty, Levine & Ciacco, CPAs. P.C. is here to help you this tax season. Visit our website to get started today!