Guest post provided by TaxAct, offering easy, affordable online and download tax filing solutions for business owners and individuals
Taxes are often the most challenging aspect of being a small business owner. Because you typically wear multiple hats, you likely don’t have time for tax planning during the year. It’s also easy to lose receipts and forget to track things like vehicle mileage. Plus, you may not know about tax breaks for energy credits deductions for job-related education.
When it comes to actually filing your business taxes, it is well worth your while to invest time in the annual task. Not only do you want to make sure you’re reporting all the necessary information to the IRS, you also want to make sure you’re getting all of your deductions and other tax benefits.
Use these three easy tips to help save both time and money on your business taxes.
Tip #1 – Gather and organize your tax information first.
Making sure you have all the documents and information necessary for your business tax return up front helps minimize errors and maximize your tax savings. Whether your business is a Corporation or Partnership, gather all documentation related to expenses and income, including:
- Last year’s tax return
- Prior year schedules of carryover losses, deductions, credits, and depreciation
- Prior year depreciation schedules
- Amounts and dates for federal, state and local estimated tax payments and payroll taxes paid
- State ID numbers for states in which your business has nexus or a presence that requires reporting
- Forms 1099-B, 1099-DIV, 1099-INT, 1099-K, or 1099-MISC received (or other records for dividends, interest or business income)
- Schedule K-1 received from entities that your business owns (lower tier entities)
- Receipts and statements to support interest and other day-to-day business expenses
- List of assets acquired and disposed of during the year
- Trial balance reports
- Vehicle mileage logs and receipts for expenses
- Summary of Forms 1099 and W-2 issued
Tip #2 – Know your filing deadline.
Starting with tax year 2016, Form 1065 tax returns for calendar year Partnerships share the March 15 deadline with S Corporations. This year’s filing deadline for Form 1120 for calendar year C Corporations is April 18, 2017 because April 15 is a Saturday and Emancipation Day falls on April 17.
Tip #3 – Your knowledge makes you the perfect person to prepare your business tax return.
Do-it-yourself tax filing solutions make it easy to prepare and file business tax returns. As you answer simple, step-by-step questions about your business, the program completes the tax forms for you. The solutions will also walk you through a broad range of business deductions so you don’t miss out on any tax savings.
The top DIY solutions import accounting records and provide detailed reports to help you accurately report capital gains and depreciation.
Uneasy about doing your own business taxes? The top DIY solutions include one-on-one tax and technical help. If you use an online solution like TaxAct Business Editions, you can try it free. Payment isn’t required until you print or e-file.
Tip #4 – It’s ok to file for an extension but it’s not an extension to pay taxes
Filing IRS Form 7004 will generally grant Partnerships and S Corporations an automatic 6-month extension to file their tax return. Calendar year C Corporations have a 65 month extension, and fiscal year C Corporations have either a 6 or 7-month extension, depending on their year end.
However, an extension to file is not an extension for Corporations to pay taxes owed. . Even if you don’t have all the information you need to file, estimate and pay what you can by the Corporate filing deadline to avoid penalties and minimize interest. With tax preparation solutions like TaxAct, you can easily estimate your business taxes, pay as much as you can and e-file your extension Form 7004.
Learn more about TaxAct Business and get an exclusive offer for Biz2Credit customers at www.taxact.com/biz2credit.