How to File and Pay for Your Small Business Taxes
Tax season is daunting for everyone. It becomes even more of a hassle if you have small business taxes to pay. You need to ensure all forms are filled out correctly so that you do not end up with an audit. You also want to make sure you have taken advantage of all deductions available to you so that you save some money. If this will be your first time going through this, here are the steps to take to file and pay your company’s taxes.
Have a Federal Business Tax ID Handy
As soon as you open your business, you should be provided with a federal tax ID to use when you file for taxes. This ID consists of nine digits, and it is valuable for more than just filing for taxes. It is also used whenever you apply for licenses or open a new bank account. If you do not currently have an ID, then you should immediately start taking the steps to get one because it can take a while to go through the process.
Determine State and Federal Tax Obligations
Your legal obligations concerning your local, state and federal tax forms are going to vary substantially. You should do your research to make sure you have all the proper forms for each level of government. You will likely need to pay property, sales and income taxes on the state level. For your federal small business taxes, you need to make sure you pay the excise, employer and estimated taxes. Additionally, the federal level has different requirements depending on whether you have an LLC, partnership or sole proprietorship.
Determine What Tax Year to Use
There are two different types of tax years that can be used when filling out tax forms. The right one your company needs to abide by will depend on the exact type of business you are running. There is the calendar year, which is the normal year that runs from January 1st to December 31st, and most LLCs, partnerships and sole proprietorships will qualify for this one. There is also the fiscal year, which is implemented by larger corporations. This year is generally used by companies that have high levels of revenue coming in, so most small businesses will not qualify.
Taking care of your small business taxes as soon as possible is highly recommended so that you are not stressing out right up to the deadline. It may even be beneficial to bring an accountant on your team to assist you. For more business tips to help your business, contact Revap Group Capital at 708-478-9660.