Tax Time Considerations

It’s never too early to start planning for taxes, especially when you own your own business.  Here are some considerations that should help make tax time easier.

First, choose the right structure for your business. Depending on whether you set up as an LLC, a corporation, or something else, your taxes will be determined differently. Choose the right setup for your business to save headaches down the road.

Once your business is established, there are things you can do throughout the year that will make tax time less stressful.

Keep your accounts in order throughout the year rather than waiting until year’s end. This will make it easier to address any issues before taxes are due.

Save receipts for any expenses you plan to claim. While you are not required to send these in with your taxes, you will need to have them in case you are audited. It will also be easier to remember to claim that business dinner you had last January if you have the receipt for it!

You’ll also want to review any charitable donations your company has made.

When tax time arrives, there are a few things that will help it go smoothly.

Get your tax documents in order, whether that’s 1099s you’ve received, or W2s or W3s that need to be sent out.   

Work closely with a financial advisor or accountant to make sure you’re claiming all the deductions and receiving any credits that you are eligible for. Tax codes can be complicated, so it’s best to have a professional help you sort out the details.

Finally, start early. If you think you won’t be able to meet the April deadline, you can file for an extension until October—just remember that if you owe any taxes, they’re still due April 15. You’ll be expected to estimate what you will owe and pay it before the original deadline.

For more information, visit irs-dot-gov-slash-businesses.