Temptation can be an attempt to save money by preparing business taxes yourself. Perhaps you have been paying tax specialists for years and are starting to think about expenses, or you have just started a new business this year. Can I file my own business taxes?
When can you make your own business taxes?
You can always try to pay your own taxes or use business tax preparation software. Ultimately, whether you manage it effectively depends on your type of business, its complexity and tax experience.
Requirements for completing business declarations range from submitting an additional form or two with a personal tax return to completing a corporate tax return.
Review the tax form appropriate for your business and decide what information will be needed to complete it and where you will receive it. Most will come from your financial statements, including the balance sheet and profit and loss account.
The only companies and sole proprietorships with limited liability
Only owners and sole proprietorships, including limited liability companies (LLCs), can complete Annex C to calculate their business income and attach this form to their personal tax returns. It’s relatively simple.
You have sole ownership if you own and manage your own business. You may have one or more employees, but you have no co-owners and you have not taken any steps to include or create another business structure.
You own a LLC, if you chose this business formation as a legal barrier between you and your business debt and liabilities, but you don’t have co-owners.
How to submit a tax form?
If self-filing of taxes for small businesses becomes too complicated or confusing, it is advisable to consult a professional the first time to understand all the necessary steps and documentation.
1) Collect each tax form that you must complete for your type of business. Only owners may only need Form 1040, Schedule SE for self-employment taxes, and Schedule C-EZ to report annual business profits.
2) Complete each form as instructed, making sure that no sections are skipped. In some cases, you must complete multiple copies of the same form.
3) Complete all business deductions for which you are authorized. The C-EZ schedule applies to business deductions of $ 5,000 or less, and the C schedule is used to detail business deductions and incurring over $ 5,000 for business expenses.
4) Complete the estimated tax forms for next year. According to the IRS, taxes must be paid throughout the year.
5) Visit IRS.gov and select an authorized supplier of electronic files. Follow the supplier’s instructions to file a tax return with the IRS.