Preparing for filing your taxes as a small business owner can be complicated. Here are five tips for small business owners to follow while prepping for taxes:
- Do Your Research. If you do not file your taxes correctly, you could be penalized in fines and punitive interest costs. Sales tax, payroll tax, and income tax also must be filed accurately.
- Take Advantage of Deductions. Taking advantage of deductions permits you to reduce business costs from gross income. Small business owners should research and take advantage of automobile deductions, home office deductions, travel expense deductions, and entertainment expense deductions.
- Categorize Your Business. Placing your business into the right category can help decrease your tax rate. It is important to understand the different categories, because each one has different tax liability and rates. Identify which one is best for you. Sole Proprietorship, Partnership, Limited Liability Corporation, S-Corporation, and C-Corporation are some of the options you can choose from.
- Control Your Tax Due Date. Even though they are not always granted, you might want to ask for an extension on your taxes. Try to delay collection of payments and the sale of assets until the New Year. However, you might want to speed up real estate and equipment purchases.
- Bargain a Monthly Payment. Discuss with the IRS a monthly tax payment if you are having a hard time paying it. A monthly payment will permit you to pay them off in smaller amounts.
If you have any questions about small business laws or if you need assistance in filing your taxes, contact an experienced Arizona small business attorney from JacksonWhite.
Call JacksonWhite’s Small Business Law Team at (480) 464-1111 to discuss your case today.