It is never easy when you own a business, especially when tax time rolls around. The stress level can be high, so it is important that you always have a lot of great tips that you can keep in mind that will make the process a whole lot easier.
1. Understand The Forms
Believe it or not, a lot of businesses that are taking care of taxes on their own are not quite sure which form to use. If you are a partnership, you will need to report all of your income, losses and expenses using Form 1065. When you are a sole proprietor, you will need to use the Schedule C to list the business income and expenses that you have. If you have chosen to treat your business or LLC as a corporation, you will have to form a corporate tax return using Form 1120. The IRS has a list of forms here.
2. Deduction For Home Office
Smaller businesses may be intimidated while trying to file taxes, however you will see that there can be a lot of different deductions that you can take. As of 2013, you now have the ability to use a more simplified method for determining your home office deduction. In the past, you had to add up all of your costs and then multiply that number by the portion of your home that is used as office space. Now you have the ability to select a deduction for $5 on each square foot of office space, with a deduction cap of $1500.
3. Ask For More Time
A lot of people may not realize that they do have the ability to ask for an extension. Filing an extension will help you to make sure that your taxes are done correctly instead of simply rushing to make the deadline. It’s better to file late than never at all. Tax invasion is a federal offense and you can be arrested and put into jail. According to a bail bonds company in Toms River New Jersey, over 2,000 people a year get arrested for tax invasion!
Overall, you will see that as long as you take the time to research the deductions you can take and have all of the forms in order, filing taxes for your business should go smoothly. For more information you can watch this video: