Preparing Your Business for Tax Season
It’s officially the start of tax season, and if you’re a business owner, you know your finances must be in order for tax season. However, with so many forms and so much information to account for, it can be a daunting task for your business every year. That’s why preparing your business and taking the right courses of action ahead of time is vital.
With careful preparation, you have the power to file your business taxes as seamlessly as possible. In this blog post, allow our team at Landmark National Bank to provide a comprehensive guide on how your small business can best prepare for and file your taxes this calendar year.
What Do You Need To File Business Taxes
As tax season begins, the best thing you can do to prepare and file your business taxes on time is to get organized. Gather all necessary documents and information to file for your business. This includes what type of business you fall under, such as an LLC or LLP. Additionally, consider where you will be paying your taxes. There are multiple tax filing solutions available for your business to choose from.
Collect Your Records
The most critical step in preparing for your taxes is collecting your business’s records for the year. Ensure that all your records are accurate and adequate to ensure your return is correct. Double-check that the income you report to the IRS matches the one presented on the 1099s you received. In addition to this, have last year’s tax records handy for comparison and easier access to critical information.
Types of Business Taxes
Not all business taxes play the same role in your business tax filing. In general, there are five types of business tax, which include the following:
- Income tax. You must pay the federal income tax on your business as you earn or receive during the year.
- Estimated tax. Similar to withholdings, estimated taxes are what you pay as you earn income throughout the year.
- Self-employment tax. A Social Security and Medicare tax paid for those who primarily work for themselves.
- Employment taxes. These are taxes you pay if you have employees. As their employer, you must pay certain taxes and file forms such as Social Security, Medicare, and federal income tax withholding.
- Excise tax. You pay These taxes if you operate particular kinds of businesses or manufacture certain products.
How To File Business Taxes
There are several steps to consider before and as you file your business taxes. Make sure you not only have all your income and records organized and gathered but you’ll also need an Employer Identification Number (EIN). This number is how the IRS identifies your business. If you are a sole proprietor or a solo LLC, you can often use your social security number instead. Additionally, look for additional tax forms to file for particular scenarios or specific information.
Filling Out Your Form
You have three choices when deciding how to fill out your tax form. The first is to fill out a paper return. This is among the most secure ways to file taxes, but it takes the most time to process. The second way is to utilize an online return, which can quicken the process but requires filling out electronic forms. Finally, you can go to a tax preparer to alleviate some of the labor.
When Are Business Taxes Due?
The primary tax deadline to look out for is April 15. Commonly known as Tax Day, this is when all taxes are due each year. You can begin to file your taxes as soon as early January if you have gathered all the necessary documents. However, there are additional deadlines to look for throughout tax season. Look through the IRS’s online tax calendar for more information about tax deadlines.
Additional Tips on How To File Business Taxes
Having the correct information and courses of action can help make filing your business taxes easier. However, even with the present information, there are business tax tips you can consider to make filing this year as easy a process as possible. Here are some tips for your small business to consider before you start:
- Hire the right accountant.
- Separate business from personal expenses.
- Correctly classify your business.
- Manage payroll.
- Seek your accountant’s advice on your business plan.
Open Your Business Banking Account With Landmark National Bank
Don’t wait until tax season to get your business’s finances in order. Open a business checking account or a money market at Landmark National Bank. From there, you’ll gain access to our other banking services that allow you to get paid and pay your employees seamlessly. Let our banking associates help you find the best solution for your business to create a stress-less tax season every year. Find your nearest bank branch location or contact us online to get started today!