Prepare for Tax Season

by | Nov 23, 2020 | Uncategorized | 0 comments

More Prep, Less Stress

For a business owner, there’s probably nothing less enjoyable than tax prep. But while it might not be pleasant, it’s definitely necessary. And for those who procrastinate, it’s not just unpleasant but also stressful. But it doesn’t have to be that way! There’s plenty you can do now to minimize the stress later.

1. Gather your financial information. 

The first thing you need to do is get organized and gather all the documents and records you need. That includes: 

·     Income statement

·     Balance sheet

·     Receipts

·     Bank statements

·     Credit card statements

·     Payroll records

·     Last year’s tax return

·     Estimated tax payments

2. Know which form to file.

There are different tax returns for different businesses. The right form for your business depends on its legal entity. 

·     Sole Proprietorship

·     Schedule C

·     Schedule C-EZ, Form 1040 

·     Limited Liability Company (LLC)

·     Form 1040, 1040-SR 

·     Form 8832 (if filing as a corporation) 

·     Form 1065 (if more than one member filing)

·     Partnerships 

·     Form 1065 

·     Form 1040S 

·     S Corporation

·     Form 1120-S

3. Know your deadlines.

I know we all think “Tax Day” and April 15th are interchangeable. But business tax forms are due on different dates. 

·     January 31 is the deadline for W-2s. 

·     January 31 is the deadline for 1099s.

·     March 15 is the deadline for filing forms for Partnerships, certain forms for LLCs, and form 1120-S for S Corporations.

·     March 15 is the deadline for K1s.

·     April 15 is the deadline for filing forms for Sole Proprietorships and single-member LLCs.

4. Look for tax deductions. 

Businesses can write off a number of expenses as tax deductions to offset the amount they owe on their taxes. Some of the top tax deductions include:

·     Business meals

·     Work-related travel expenses

·     Work-related car use

·     Home office 

·     Office supplies

·     Business insurance

·     Phone and internet expenses 

·     Business interest

·     Depreciation

Tax season will be here before you know it. If this information has you more anxious than the events of this year, it’s worth seeking the expert guidance of a tax professional. If you’re looking for a team that can skillfully navigate the tax code, the Miami CFO team of business, financial, and tax professionals can provide hands-on, personalized service.