When preparing a tax return after your first year as a small business owner, there are many important steps to take to consider. New business owners must have their return filed accurately, timely, and in a way that achieves the maximum tax refund. Continue reading for a few tips on how to file your first tax return, then be sure to call The Harding Group for a free consultation and more information on our tax preparation services.
Review Tax Return Completely
The first step is to look over a copy of the business tax return you will file to see which line items you’ll be expected to fill in with amounts. If there are any questions asked on the return, it’s important to make sure you have these answers readily available. These questions may be about the nature of your small business, how many years you’ve been in business, and the location of your company. Also, be sure that your chart of accounts has the correct categories of income and expenses for your to properly file returns.
Choose An Accounting Basis
As a business owner, you must decide to prepare the tax returns on the cash or accrual basis. Under the cash basis, income is recognized as collected and expenses are recognized as they are paid. Under the accrual basis, income is recognized when earned, and expenses are recognized when incurred. As a note, lenders generally prefer to see accrual basis financial statements, but tax returns can still be prepared on a cash basis. However, since a new business will likely have more unpaid expenses than uncollected income, you may consider taking those additional net expenses as a deduction by selecting an accrual basis.
Tax Planning and Preparation Services
The best way to ensure you correctly file your first tax return is to work with an accounting company that provides tax planning and preparation services. By working with the professionals at The Harding Group, you’ll have the support of an accountant dedicated to staying updated on the new tax law and understanding how to apply that knowledge in a way that helps you. Preparing your own tax returns as a small business owner can be a costly mistake, as you will miss out on opportunities for deductions that only an experienced accountant will know to look for. Call The Harding Group today for a free consultation to review your previous years’ tax returns and give you an accurate estimate for your tax preparation.
Trust The Professionals At The Harding Group
Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for emails or phone calls and will strive for open communication with our clients. Whether you are interested in business advising, tax preparation, bookkeeping and accounting, payroll services, Training + support for QuickBooks, or retirement planning, we have the expertise and years of experience to help. We serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of taxes, contact us online or give us a call at (410) 573-9991 for a free consultation. For more tax tips, follow us on Facebook, Twitter, Google+, YouTube, and LinkedIn.