When you own a company, you gain more insight into the tax process than you probably ever cared to. Not only are you responsible for paying taxes on your own income, depending on your business structure, you will be on the line for other forms of taxes as well.
You’ll also need to stay on top of each potential tax deduction so you’re always making the most of your earnings.
In order to make filing your small business taxes as painless as possible this tax season, here are five important tax-time resources to consider:
1. An Accountant
First and foremost: Your business needs an accountant.
Some business owners decide to take on the responsibility of preparing tax documents themselves. They know how to get the best bang for their buck, and a good accounting service doesn’t come cheap.
But any small business owner, in any industry, knows the importance of delegating — and that importance is never highlighted more than when it comes to doing your taxes.
No matter how diligent you are, spending more time than necessary on your business taxes means taking away a precious resource you could be applying to something else — like gaining new clients and actually running your company. And, despite your best efforts, an accountant is probably going to be able to find more deductions than you ever thought possible. An accountant will also help you avoid costly tax mistakes.
If you don’t yet have an accountant, Intuit and Xero offer great resources to find one online. You can also search national accounting organizations, such as the National Society of Accountants or the American Institute of Certified Public Accountants, to find an accountant in your area.
But regardless of whether or not you go through an accountant to file your taxes, the rest of these resources will also come in handy.
Bonus Tip: The the accounting fees from preparing your tax forms are a legitimate small business tax deduction.
2. Tax Payment Calendar
Even if you do occasionally outsource your tax efforts to an accountant, it’s still up to you to make sure the payments are being made. You need to figure out how to stay on top of your payment schedule.
It seems simple enough to keep track of when quarterly tax payments are due — the 15th of the months of January, April, June, and September — but those dates will sneak up on you if you’re not careful.
Also, different types of business structures tend to have different deadlines. A sole proprietor’s taxes are going to look different from a C-Corporation’s, for example.
Thankfully, businesses, like inDinero and Wagepoint, offer easy-to-follow tax schedule resources so you can easily stay on top of the dates you need to. And remember, you can always request an extension for filing your tax return (though not for making your payments) if getting everything in order is going to be too difficult come April.
If you like to go straight to the source, there’s also an IRS tax calendar for small businesses and self-employed individuals.
3. Quarterly Tax Estimator
If your small business will owe more than $1,000 in income, business, self-employment or payroll taxes, you will be required to file estimated taxes. In other words, you’ll pay in quarterly installments.
Again, if you go through an accountant when filing your tax return and making your tax payments each quarter, they will be more than equipped in figuring out how much you owe. Making sure you have enough in the bank to cover your quarterly payments is, of course, completely up to you.
There are plenty of solid quarterly tax estimators available online, like this one for sole proprietors and this one for S-corps and LLCs. While you may think you have a good understanding of your tax requirements, there is always the possibility of missing something completely. Plugging your numbers into a quarterly tax estimator is a quick, easy way to figure out how much you should be saving for taxes.
4. Sales Tax Guide
If your business involves selling a product or service, there’s a good chance you need to pay sales taxes.
Especially for new business owners, this may be a territory you’re completely unfamiliar with. After all, when you’re on the other side of the table and purchasing something as a consumer, sales taxes are simply added to your bill.
Thankfully, the Small Business Administration (SBA) has you covered with solid overviews of everything involved in paying sales taxes. If you need to know anything from sales tax registration to paying sales taxes on internet purchases, bookmark their link to return to in the future.
5. Payroll Tax Guide
If you have employees, you have payroll taxes. This includes taxes at a federal, state and local level. In fact, each year, employers pay more in payroll taxes than they do in income taxes.
If you’re self-employed, you pay a version of payroll taxes called self-employment taxes. For self-employment taxes, like Medicare and Social Security, someone who’s self-employed will pay both the employer and the employee’s portions of the taxes. This guide will tell you more.
Of course, these are only a few of the many resources available to you when it comes to paying small business taxes. Here are a few bonus resources to check out as well:
- Big Ideas for Small Businesses (and other similar tax blogs)
- IRS Small Business and Self-Employed Tax Center
- IRS Virtual Tax Workshop (video series)
- SBA Tax Guide
- SCORE Small Business Success Blog (search for tax posts)
Let’s face it: Taxes aren’t that fun. You probably didn’t jump into entrepreneurship because you were just so excited to get up close and personal with the American tax system.
But you also didn’t jump into it thinking you’d neglect something as important as taxes — and that’s why paying attention to your taxes year-round is so crucial. Regardless of your line of work, these resources will help any small business owner make sure they’re staying on top of their tax liability and keeping their business afloat.
The information in this post does not constitute or replace the need for professional bookkeeping, accounting or tax advice. This information has been gathered from several sources. Any errors or omissions will be corrected in a timely manner. As tax laws are constantly changing, it's important to ensure that you have the most accurate and up-to-date information.
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