By Nayelis Delgado
Know Your Deadlines:
It is easy to lose track of when to file taxes, as a small business owner it is important to keep track of when you need to file and when tax payments are due. The official deadline to file business tax returns for S corporations and Partnerships is March 15th, while C corporations (with a calendar year) and sole proprietors must file by April 15th. Consider creating a tax calendar to keep track of this, as the IRS does not take tardiness lightly. If in any case you are unable to gather all documents needed by the normal tax deadline, you may want to consider requesting an extension.
Know The Taxes Relevant to Your Business:
- Business personal property taxes
- Employment taxes
- Excise tax
- Income tax
- Self-employment taxes
Know The Business Tax Forms You Will Need to File:
Depending on what business entity your company has chosen, there are specific tax forms you will need to file. Some common IRS forms for small business taxes include:
Business Entity Type | IRS Form |
Sole Proprietors and Single-Member LLCs | Schedule C (Form 1040) |
Pass-Through Entities | Schedule K-1 |
Partnerships | Form 1065 |
S-Corporations | Form 1120-S |
C-Corporations | Form 1120 |
Employers | W-2, W-3, 1099-NEC, 940, and 941 |
Collect All Necessary Financial Documents
Accurate records of your income and expenses are essential to support the figures you report on your tax return. The complete list of required documents will vary depending on your business, below is a basic checklist you will need to file your taxes.
Business Income
You will need to gather information pertaining to your business income:
- Balance sheet
- Income statement
- Interest from business bank accounts
- Receivables
Inventory & Materials
You will want to show the history of activity over the course of the year by preparing any documentation as it relates to the company’s inventory and materials, or cost of goods sold:
- Change in inventory amount
- Current Inventory
- Materials
- Supplies
Business Expense and/or Tax Deduction
Tax deductions and credits are given to small businesses to reduce how much they owe in taxes. The financial documents that need to be collected for business expenses can fall into many different categories:
- Communication Expenses
- Landline
- Internet
- Mobile phones used for business purposes
- Financial Expenses
- Mortgage interest on a building owned by the business
- Investment expense and interest
- Business loan interest
- Home office expenses
- Utilities
- Mortgage interest or rent
- Real Estate Tax
- Square footage of home and office space
- Insurance
- Legal Expenses
- Casualty loss insurance
- Legal counsel
- Operational Expenses
- Office supplies
- Office space rental
- Marketing Expenses
- Business cards
- Social media marketing
- Traditional advertising
- Personnel Expenses
- Employee wages
- Contractors
- Consultants
- Travel Expenses
- Hotels
- Meals
- Rideshares (Taxi, Uber)
- Airfare
Check in With Your Tax Preparer
A tax professional will ensure all documents are filed correctly and that you maximize any deductions or credits that are available to you.
Request a Tax-Filing Extension if Necessary
If you are unable to gather all the necessary documentation to file your taxes by the tax deadline, you may consider requesting an extension. However, you must request the extension before the original due date.
Even if you request an extension, you still need to pay taxes owed by the original deadline to ensure you don’t incur penalties.
This information has been prepared for informational purposes only, and is not intended to provide, and should not be relied upon for tax, legal, or accounting advice. If you have any questions about filing your business taxes, please do not hesitate to contact us at Lear & Pannepacker.