Getting ready and filing your business taxes is a part of managing business enterprise that business owners need to address yearly. Small business taxes are simple as compared to taxes for large organizations, however still small business owners can find themselves scratching their head the first time around.
Accounting software can help to track or deal with expenses. Or in case you select, tax preparation and submitting can be performed on your own or with the help of professional tax expert. In both cases, tax forms can be submitted online to make the submission process more efficient.
- Get an EIN number from the IRS Corresponding to the IRS.gov, banking institutions and other companies can also require an EIN when working with you, although an EIN isn’t needed for all small business tax filings.
- Maintain accurate statistics and records of all sales and costs throughout the year. Keep things, including sales receipts, canceled checks, invoices, deposit slips and some other documents that confirm your company’s earnings and expenses, and that demonstrate any possible deductions. Keep all tax-related paperwork in a safe place for almost 5 years. This paperwork will prove helpful if the IRS asks you to provide an explanation for any object on your tax return.
- Preserve accounting and bookkeeping system to record earnings and expenses. A primary single-entry system is reasonable for tax purposes. This could additionally help you in demonstrating profits, expenses and subtraction/deduction claims in case the IRS asks for additional information.
- It is required for each new worker to fill and sign a W-4 Form. A W-4 Form is used to find out how much cash to hold back for employment taxes. Withhold the appropriate amounts from every paycheck, and keep precise information of all withholdings. Do not forget putting tax withholdings in a separate and secure account.
- Collect and complete all important paperwork. Use Schedule C or C-EZ of Form 1040 to file sole proprietor income taxes. Make use of Schedule SE of Form 1040 for self-employment. Use Form 1065 to file partnership income taxes. All the tax forms can be acquired online at IRS.
- You can also file through online E-file system. Almost all small businesses are qualified to use the E-file system, making tax form submissions quicker and eradicating a great deal of the problem. To file through E-file program, visit gov/efile.
- Fill and send a Form W-2 to each worker and the Social Security Administration (SSA) every year. Fill and submit a Form 1099 to each independent contractor and the SSA. Use the details from your withholding records to fill information for W-2’s and 1099’s.