No one can say they enjoy doing their taxes. It is messy and complicated, with unending forms and too many numbers. It also entails spending a lot of time getting it right, which may affect other aspects of your business. That's why owners need to be efficient when handling their taxes, so no part of their business is left behind.
Tax preparation is tedious, but you can't escape it. At some point, you need to perform your tax obligations to keep your business running smoothly. To help you out, we have a checklist of the things you need to prepare and some helpful tips for tax preparation.
Keep your business running smoothly and maintain your good record with your local tax collection agency. Here are some things you should do in order to get the best business tax management possible.
For individual taxpayers, the deadline for filing tax returns is April 15. In most common scenarios, this also applies to small business owners. However, depending on the type of business you choose to establish, timelines may change.
For instance, if your small business is organized as an S corporation, the tax filing deadline is on March 15 at the conclusion of each fiscal year. In addition, several tax-related tasks have different deadlines. Make it a habit to consult your local tax calendar, so you never miss them.
Missing the deadline may incur unnecessary penalties, and that money can be allocated to aspects of your business that need improvement instead.
One of the most time-consuming parts of tax preparation is gathering all the documents you need for filing and validation. In addition, each type of business may require different tax forms. If you don't know which to get, these forms are available for download on tax collection agency websites.
Generally, forms include a complete picture of your finances and tax obligations. Sometimes, tax collection agencies may require supporting documents that go with the form, so have copies of your documents.
Here are some of the most common tax forms you will encounter.
The taxes you are due to pay depends on the income you declare on the forms you file. The records are one way for tax agencies to verify if the numbers you report are true. When the IRS visits your company to conduct an audit, these records will also be useful. Of course, a number of financial records go through the business. So if you don't know what you need for your taxes, here are some important income records you should have ready.
You can decrease the tax amount due by qualifying for exemptions in several ways. But the process is long and requires several documents for verification. The documentation of your business expenses is evidence you can submit for tax breaks.
Correct and more detailed information will help get your deductions approved easily. Here are some business documents you should prepare when applying for deductions and exemptions.
Since exemptions may not be so clear cut, a tax expert's advice is usually recommended if you want to get the most from your allowable deductions.
Tax preparation goes both ways. Just as you report income to your local tax collection agency, they also need to return information to your business. So ensure you receive the information you need to ensure your tax preparation is on track.
For example, if your business has employees, you should have W-2 forms that tell your workers the total income and allowable deductions. In addition, these forms will tell you if the amount you paid is taxable. Some taxation laws don't collect taxes unless you reach a certain amount.
It’s not a mistake to ask for an extension if you need the extra time to complete your tax returns. Remember, you also have to file a request if you need more time to complete your declarations. However, extensions are only applicable for filing. This means you still have to pay your taxes on time.
First extensions are typically simple to obtain; after that, asking for another extension will be a more challenging process. Finances are messy, and if you're a business owner who wants to get everything done ahead of time, you may want to find tax preparation services for small businesses to help you.
If this year was challenging for you, make appropriate adjustments to make tax preparation a breeze. Eliminating problems requires knowledge of what to do and what not to do. Moreover, it helps you avoid penalties due to late filing.
Take note of the things that you could've done differently and implement them in the next taxation year. It takes years for business owners to learn how to manage their taxes smoothly, but you can speed it up through consultations with tax experts.
Tax software is the best way to make preparations convenient and accurate. In addition, tax software can help with planning. All you need to do is input your data. It also gives you a projected cost of the tax you owe and ways on how you can save.
Moreover, successful tax planning lies in organized bookkeeping. Some of the available software comes with automated bookkeeping, so your financial records will always be in line and ready for tax season. This way, preparations are faster and less prone to errors.
The best way to get taxes off your hands is to get a professional to handle them. If outsourcing is one of the most complicated parts of your business, get an expert to do it. Unloop offers tax management for ecommerce and small businesses. This way, you’ll never have tax complications again.
Our tax services include the following:
We also ensure the services are accessible to everybody. We have three different price points, so you don't blow your entire budget all at once. You can talk to our experts to see which one fits your business needs best.
As a new business owner, learning how to manage your taxes will take time. Tax preparation is a complex process, and it can be time-consuming when you have no idea about the things you need to do. This checklist we created for you will help simplify the process. If you want to focus on other parts of your business, outsourcing tax preparations to experts is a wise decision. Aside from tax management, we also have other services your business may benefit from. Take a look at our payroll management, forecasting, and bookkeeping services, and don't forget to book a call with our experts to get started.
Unloop is the first and only accounting firm exclusively servicing ecommerce and inventory businesses in the US and Canada. With the power of people and technology, our team dives deep into COGS and inventory accounting. You are paired with a dedicated bookkeeping team that prepares accurate financial statements, financial forecasts, and can also pay bills or run payroll for you. Come tax time, everything is organized and ready to go, so you don't need to worry. Book a call with an ecommerce accountant today to learn more.