Why Your Small Business Tax Preparation Strategy Matters
When it comes to your taxes, from onboarding to filing, you need to be prepared. A strategy is very important for small business tax preparation. You don’t want to wait until tax season is upon you and nothing is in order. Here are the top reasons your tax preparation strategy matters.
You Need to Know Which Forms You Need
Depending on the type of small business you run, there are certain forms you’ll need to fill out. Often, forms need to be filled out at the beginning of employment and then they will be filed each year for your taxes. So, the first part of small business tax preparation is to decide which kind of company you are: sole proprietor, corporation, S corporation, or partnership. You’ll need to do research to see which form goes with which designation.
Gathering Information Takes Time
Along with forms, there is a lot of information needed when you file your taxes. You need accounting records, bank statements, payroll, and more. Small business tax preparation guides will give you an idea of when you should start collecting records, who will have them, and any time limits on requests. This can be the most time-consuming part of filing your taxes, so it’s important to stay on top of it and start early.
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You May Need to Pay Quarterly Taxes
If you are self-employed, you need to pay estimated quarterly taxes to the IRS. Because you are self-employed, you’ll be paying both the “employer” and “employee” sides of taxes, so you don’t want to wait until filing season and get stuck with a huge amount owed. Figuring out your quarterly payment is part of your small business tax preparation. You can do this by estimating your yearly income and figuring out how much you’ll owe based on your tax bracket. Then you’ll split that payment into four.
Be Aware of Deadlines
The most important part of small business tax preparation is taking note of every deadline. From paying quarterly estimates, to sending out forms, to actually filing your taxes, you need to know when everything is due so that you don’t fall behind. Being even one day late can cause a lot of trouble and stress.
If you’re not sure what else should be included in your small business tax preparation, consider working with a tax software with in-house support. Halon Tax is a tax filing software that works with real CPAs to make sure you file properly. To get started today, contact us at 612-293-8094 or firstname.lastname@example.org.