Many people dread tax season and find the work required complicated, overwhelming, and stressful. If you are this kind of person, it may help to make a tax prep checklist for your small business tax return. Putting everything you need to do down onto a list can not only help you stay organized but put your workload in perspective. To make sure your small business tax return is done correctly, follow the tax prep checklist below. If you still have questions, consult the professionals at The Harding Group for all small business accounting and tax concerns.
Know Which Tax Return to File
The first item on your tax prep checklist is figuring out which tax form to file. The form you submit depends on your business entity.
- Sole proprietorships: Use Schedule C
- Single-member LLCs: Schedule C
- Partnerships: Form 1065 and Schedule K-1
- Multi-member LLCs: Form 1065 and Schedule K-1
- Corporations: Form 1120
- LLCs taxed as corporations: Form 1120
- S Corp: Form 1120-S
Understand Your Tax Filing Date
Your filing deadline will depend on your business structure. Sole proprietorships, single-member LLCs, multi-member LLCs taxed as corporations, and corporations that end their tax year on December 31st must file their return by April 15th.
Partnerships, multi-member LLCs, and S Corps have a filing deadline of March 15th. If either date falls on a weekend or holiday, you have until the next business day to file.
Gather Your Records
This step on your tax prep checklist is probably the most intricate. First, locate your taxpayer identification number. Then, analyze your balance sheet and income statement, which should be easy if you use accounting software. You will also need receipts, bank statements, credit card statements, and payroll records. Finally, you should be prepared to locate copies of your estimated tax payments and the previous year’s business tax return.
Look for Tax Deductions and Credits
Look for the following tax credits you may qualify for, including:
- Small employer health insurance
- Disabled access
- Work opportunity
And consider which expenses you may be able to claim a tax deduction for, which can include:
- Home office
- Business use of car
- Charitable contributions
Before you claim a credit or deduction, you must have physical proof and follow the IRS guidelines.
Determine If You Need an Extension
If you discover you won’t have enough time to file by the deadline, do not send in a messy return. Instead, file for an extension by submitting the IRS extension form before the tax return due date.
Research Alternatives if You Can’t Pay a Tax Liability
If you can’t afford to pay your tax liability in one lump sum, you should know your options and pursue one that meets your needs. The IRS offers a few alternatives, including:
- IRS installment agreement, or a monthly payment plan
- Offer in compromise, or a tax debt settlement
- Temporary delay
In this case, you must still file your return on time unless you have received an extension.
Talk to Your Accountant and File
Consult with an accounting professional to make sure your return is accurate. After consulting, you can e-File or paper file your tax return and take a break until next year.
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, YouTube, and LinkedIn.