The 2024 tax season officially began in late January. And the filing deadline for 2023 is April 15 of this year, which is the standard tax filing deadline.
Even if you're an average, older office worker, filing taxes can be complicated. But if you own a small business, the process of filing a tax return can be even more complicated. So if this is your first year filing a small business tax return, here are some important steps to take now.
1. Organize your records
From a tax perspective, the advantage of being a small business owner is that you can deduct certain costs associated with making a living. However, you may need to submit a lot of documentation to claim the appropriate deductions, so now is a good time to start organizing your documents and records.
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Specifically, you need to make sure you have the following records:
- Corporate purchases ranging from office supplies to licenses and fees
- business related travel
- Salary expenses
- Payment of rent (if applicable)
- Payment of any estimated taxes you may have paid to the IRS along the way.
- Retirement contributions (if applicable)
2. Find help
Mark Steber, Chief Tax Information Officer at Jackson Hewitt Tax Services, is passionate about getting help with all things tax. “I almost always recommend working with a tax professional rather than risking filing your tax return yourself,” he says.
However, if you are a small business owner, more It's important to find a good accountant to help you with your taxes. There are many nuances and rules that apply especially to small businesses, and you need to make sure you're compliant to avoid problems with the IRS.
Perhaps you currently employ a bookkeeper to manage your company's bank accounts. However, that person may not be a CPA or tax professional and may not be fully qualified to help small businesses file their tax returns. If you don't know your employee's credentials, seek advice early in case you need outside help.
3. Set aside money in case you owe money to the IRS.
If you're filing your taxes for the first time as a small business owner, you'll likely receive a refund. Or you could end up paying money to the IRS. It's hard to know.
In the coming weeks, you may need to cut back on business-related expenses and instead put more money into your company's bank account in case you run into a shortfall. That way, you can pay what you owe directly to the IRS and potentially avoid the hassle of payment plans and tax debt.
Filing small business taxes can be stressful, especially if you're new to the world of running a small business. So get organized now. Gather your documents and arrange for assistance before the April 15 filing deadline approaches. Not having to rush the application process is another way to make it go more smoothly.
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