How can small business owners prepare taxes this year?

Small Business Taxes

1. Organize your financials

The first, most important thing to do is keep an adequate eye on your books and records. At DiRosa & Kuchinsky CPA’s we keep a monthly and quarterly record throughout the year of all of our clients. This includes a P&L report, sales tax, payroll and much more. Each month you will receive your financial statements to see where your business stands financially in that current time.

2. Business Vs. Personal Tax

Keep all personal expenses and business separate. You cannot write off personal expenses to the company. We suggest opening a business bank account paying all your business expenses out of there. This way nothing will get mixed up when reconciling your books.

3. Filing Form 1099

Keep track of Sub-Contractors. You can file form 1099 at the end of the year and distribute them by the end of January. This will help as a write off for the business taxes. Any time you are hiring an outside laborer for work and pay them over $600, you must file form 1099 with the IRS.

4. Partnership & Corporations

If you have a partnership or corporation please make sure to file before the appropriate filing date for those entities. These filing deadlines are different than the individual 1040 tax returns. Failure to file a return on time can result in interest and penalties.

5. Sales tax

If you are enrolled with the state to pay sales tax be sure to pay monthly and filing the quarterly forms. Depending on the industry there may be jobs or sales that are nontaxable. Be sure to keep an eye on that so you don’t pay tax for no reason. Restaurants using Door Dash, Uber eats, and Slice should be aware that those entities already take out sales tax before depositing your funds into the account. File your sales tax on time to avoid penalties!

6. Payroll & Tax

Taking control of your payroll is one of the most important roles as a business owner. Paying payroll tax is very important. Please file the appropriate forms on time. If you are with a payroll company they should handle all taxes, fees, and forms. If you are doing in house payroll with your accountant they should be taking care of it. If you have neither let us know and we can help you out! Let us help you!

For more information about your tax situation visit the IRS website – For more DiRosa CPA case Studied visit here