Keeping exhaustive and accurate records of your company's income and expenses throughout the year makes filing a tax return and paying the right amount of taxes a. Running a business is hard enough without adding the complexity of filing taxes every year. According to experts, the key is to work with your accountant all year round, not just when you prepare your tax return. Making financial decisions without consulting an accountant or financial advisor can put you at risk and cost you more money in the long run, says John Blake, public accountant in Hamilton, New Jersey.
All companies, except corporations, must file an annual income tax return. The form you use depends on how your company is organized. See Business Structures to find out what returns you should file depending on the established business entity. The IRS assigned this nine-digit number and you use it as your Social Security number when you file business tax returns, make tax payments, or open a business bank account.
For more information, see 10 key tax deductions for your small business and big tax breaks for small businesses. You may also need to file specific forms for amortization, home-based businesses, self-employment taxes, and estimated taxes. Prepare appropriate tax forms to declare any business income or loss, legitimate deductions, and estimated taxes. If you are not required to make estimated tax payments, you can pay any taxes due when you file your return.
However, you have several options for reducing your tax bill using popular small business tax deductions. Here are the nine best practices for small businesses when it comes to tax preparation and small business accounting, and working with an accountant or financial professional. Reduce your tax liability by taking advantage of the many small business tax exemptions that are now available due to changes in the tax code. If your business is organized as an LLC, it may be taxable as a sole proprietorship, partnership, or corporation, and you may be responsible for self-employment taxes in addition to federal and state income taxes.
For more information on tax forms and deadlines for your small business, see How to File Business Taxes for Your Small Business. They provide proactive advice to help you save money, grow your business and avoid future tax problems. Keeping comprehensive and accurate records of your company's income and expenses throughout the year makes it much easier to file a tax return and pay the correct amount of taxes. All taxpayers are required to pay taxes on the income they earn, and the IRS expects to receive those taxes as their income is earned and not at the end of the year when they file their tax return.