Even though it takes a lot of work, owning a small business can be a rather rewarding and fulfilling venture. While you’re getting your small business up and running, be sure to take out some time to research the tax side of being a small business owner. Having help with tax preparation in Chandler AZ for small business owners and individuals is always the easiest way to make sure you have your ducks in a row. When tax season rolls around, there are specific documents that you’ll want to make sure you include with your tax return.
LLC and Sole Proprietorship
You’ll need to be sure that you fill out a Form 1040 if your business is a limited liability corporation, LLC, or a sole proprietorship. You’ll also need to complete Form 1040 Schedule C and Form 1040 Schedule SE in order to document all of your business profit and loss and calculate your self-employment taxes.
You and all business partners involved in your business will need to fill out individual Form 1040s and Schedule SEs. All business partners will also need to complete a Form 1065, which is also known as Schedule K, in order to note partnership profits and losses.
You’ll need to complete a Form 1120, also referred to as a Schedule K-1, if your business is set up as an S Corporation. This specific form is also used to note your profits and losses. Make sure that each shareholder fills out an individual form so that they can properly file their personal income tax return. If your business sends periodic payments to the IRS throughout the year, you’ll need to fill out Form 8109 in order to show which tax payments you’ve already made. One good thing about submitting a Form 8109 is that is can potentially lower the amount of taxes that you owe.
Don’t hesitate to reach out to a tax preparer in Chandler AZ if you ever find yourself confused while filing taxes for your small business. We offer our professional services year round to businesses of all sizes.
A lot of people procrastinate doing their taxes. When they do this, they risk making errors and getting fined. Some people even miss the deadlines and receive an additional fee. If you want to avoid these hassles, it might be a good idea to use tax preparation Chandler. Since taxes can be time consuming, it is important to make preparations to ensure you get them done correctly and one time. Here are some suggests to help minimize the stress involved with getting taxes done too late.
You Should Always Be Preparing
Wouldn’t it be ideal if you knew that you could get your taxes done if you started working on them two months before they were due? Of course! However, taxes do not always work like this. Everyone has different needs. Some people’s taxes require a lot of attention. Others have minimal needs before they file. For this reason, it is best to try to continually prepare. You should have a system for keeping track of relevant records and reports that will make the filling process easier. Have a file for receipts and other tax related forms that you update on a weekly basis.
Get Tax Preparation Help
Since individual tax needs vary, it is a good idea to seek a tax accountant in Chandler at the beginning of a new tax year. This way you can have a heads-up on what kind of information you should track throughout the year. Having a go-to person for tax-related questions as they pop up is a great way to stay on track. Building that relationship will also decrease the time needed when it comes time to file. Your tax accountant will have become familiar with the specifics of your situation and will, therefore, have less information to gather at filing time.
Know When You File
Make sure you know when you need to file your taxes. This will ultimately influence when you begin the majority of your tax work. Most people file in April; however, some businesses file their taxes at on a fiscal year system. Some independent contractors and self-employed people need to file quarterly. Whatever your filing date(s), it is important to stay on track and be prepared when the time comes.
The difference between the fiscal year and calendar year requirements can get confusing. Businesses need to make a choice when to begin and end their reporting period. But what are the pros and cons for each? The calendar year can be an easier option simply because people are used to January 1 through December 31 as an annual cycle. However, including the sales numbers during the holiday season can give a company a boost in profits reported for the year—making the fiscal year more appealing. Consulting a tax professional in Chandler will help you sort out the options, as not everyone can choose between the two: Sole proprietors, for example, cannot opt to file taxes based on a fiscal year. In the meantime, here are some tips to sort it out:
Pros to Filing on a Fiscal Calendar
Starting your taxes on a date that best suits the needs of your business is the largest pro to filing fiscally. A business can opt for any start date. Many companies have seasonal highs and lows. If your high is during April and your largest expenses are during November then a calendar year would end while you are down. Your expenses, which are made up the following April, would be separated on a calendar year.
Another reason to choose a fiscal year is if you get kickstarter money toward the end of the year. This will be taxed as income and you may not have had time to purchase items for the project that could be tallied as expenses.
Choose a Fiscal Date Carefully
When you do file your first tax return, the date is fairly set from that point on. As it is difficult to change, it is important to get right. This can be a stressful decision for a new start up who many not know the way business will ebb and flow in years to come. Checking with a business consultant in Chandler is a good way to plan for the best date to start your fiscal year.