Tax Returns for Small Businesses
Most business owners get excited at the prospect of receiving a tax refund at the end of the year, but at the same time, successfully completing a tax return can be a stressful process. With the right organizational methods and tools, small business owners will be off to a great start as tax season draws near. Luckily, filing taxes is quicker and more streamlined than it used to be.
Introduction to Tax Return Laws, Products, and Tools
Filing a tax return is different for a small business than it is for other types of entities, so it is important to know the basics to ensure that taxes are being reported correctly and that the proper refund amount is calculated. It’s also important to become familiar with the basic tax laws for small and medium-sized businesses at the state and federal level. There are also many products and tools available to ease your stress and simplify the tax return process. Receipt collection envelopes, filing cabinets, and accounting software are all tools to help business owners successfully keep track of their tax obligations and obtain a refund at the end of the year. These tools will also save time and improve productivity by keeping your office or work area neat and organized.
Small Business Tax Innovations
To help business owners understand and meet their federal tax obligations, the IRS offers virtual small business workshops online and via CD. There are also workshops scheduled all over the country to help business owners obtain a tax refund. Some require a fee, but most are free. There is also a large amount of free information, including worksheets, calendars, and other tools, available on the IRS website.
Before the Internet, filling taxes was much more difficult and time consuming. Profits, losses, and expenses were handwritten in ledgers, and specialized tax accountants would spend days or even weeks gathering the necessary figures together to assess the business taxes and report them properly to the government. There were no computers to complete complex calculations, no electronic filing methods to speed up the delivery process, and no online banking to get a tax refund quickly.
Pricing
To obtain the largest tax refund possible, invest a bit of money in the right tax return software and supplies. Organize your office, and buy as many organization tools that your budget will allow. This includes file folders, filing cabinets, binders, and shelves. The more organized you are, the easier filing taxes will be.
You should also consider hiring a professional accountant to prepare your business taxes, especially for the first couple of years. Check with several local tax return professionals, as they all have different rates. Owners of small or medium-sized businesses should expect to pay a couple hundred dollars to have an expert prepare and file tax forms.
Identify and Correct Common Mistakes
Some tax mistakes can cause a business owner to incur extra fees or be audited. Hiring a professional to file your taxes will reduce the risk of having mistakes on your tax forms. The most common mistakes are:
• Forgetting to claim the Small Business Healthcare Tax Credit
• Failing to claim the Work Opportunity Tax Credit
• Missing the Returning Heroes Tax Credit
• Filing the wrong form
• Filing for the wrong year
If you receive a notice from the IRS about incorrect tax information, do not simply assume that the IRS is right. You have the option to hire an attorney or visit the local IRS office to clear up any issues.
With a little preparation and education, a small business owner will have a better grasp on filing taxes and obtaining a tax refund. Tax returns aren't as complicated as they were years ago, but it still makes sense to hire a professional accountant to make sure your business taxes are done properly. If there is a mistake, research the problem yourself or hire someone to help you fix it. When getting a tax refund, the most important thing is that you get the amount you deserve.