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The process of small business tax filing can be a very tedious one that requires a lot of work. Some small business owners like to file their own taxes, as it gives them a level of control over their paperwork. Here are a few things to consider about filing your small business taxes by yourself.
Tax Planning
One of the most important things that you can do is to plan for your taxes far in advance. In order to minimize the amount of taxes that you pay, you want to take the proper steps from the beginning of the year. Many businesses let things unfold on their own and then scramble at the end of the year to try to save money on the taxes. As a business owner, you need to take a proactive approach to your tax planning.
Expenses
Throughout the year, you need to keep track of all of the expenses that you incur as part of doing business. There are many different things that you can deduct from your taxes. These may include the salaries that you pay, bills, and many other expenses that are tax-deductible. Even items like books or magazine subscriptions for your business can be deducted. You can deduct the coffee you buy for the break room. Therefore, it is necessary to keep a detailed record of every expense that you have on behalf of the business. This will allow you to maximize your deductions and save as much money as possible along the way.
Income
The amount of taxes that you pay will depend greatly on the amount money that you bring in. Therefore, if you can find ways to lower your taxable income, this could be to your company's benefit and help you save money on taxes. You can do a few things at the end of the year to achieve this. For example, if one of your customers owes you money, you might consider delaying acceptance of the money until the new year. This will help lower your yearly income and the amount of taxes that you owe as a result.
Another strategy that you might use is to contribute to a retirement plan for your employees. If you contribute to a 401(k), for example, for each of them, you can write this amount off on your taxes.
Filing
Once it becomes time to actually file your taxes for the year, you will need to make sure that you use the appropriate tax form. There are a number of different ways that you could set your business up, and therefore there are also a number of different ways to file your taxes for businesses. Depending on which type of business that you are, you may need to fill out a different tax form. For example, an LLC will not file their taxes in the same manner as a "c" corporation. Make sure that you are using the appropriate tax form in order to file your taxes with the IRS.
