As a business owner, taxes can be confusing and stressful. It is important to understand the basics of tax law in order to ensure your business is compliant with the laws and regulations set forth by the IRS. This guide will provide you with an overview of the most important tax basics for business owners, including deductions, filing requirements, and more.
Filing Requirement
The first thing you need to know as a business owner is when you are required to file taxes. The IRS requires most to file an annual return on or before April 15th each year. If your business is a Multimember LLC, S Corp, or Partnership, your deadline is March 15th. You may file for an tax filing extension. However, you must remit your estimated corporate tax due by the deadline.
If your business is a corporation, you must also file quarterly returns throughout the year. If you believe you will be at a profit by the end of the year, you must calculate your estimated tax payments and remit payment quarterly or incur a penalty at the time of filing. Additionally, if your business has employees or contractors, you may be required to submit additional forms such as W-2s or 1099s by January 31st.
Tax Deductions
As a business owner, there are many deductions available to reduce your taxable income. Common deductions include start-up costs, office supplies and equipment, travel expenses related to conducting business activities, insurance premiums, legal fees associated with running the business and more. Additionally, businesses that donate money or goods to charitable organizations may be able to deduct those contributions from their taxable income as well. It’s important that you keep track of all eligible deductions throughout the year in order to maximize your tax savings at the end of the year and have auditable records of deductions taken.
Tax Credits
In addition to deductions, there are also several credits available for businesses which can help reduce your tax burden even further. These credits include research and development credits for companies investing in new technologies or products; energy efficiency credits for businesses using renewable energy sources; hiring credits for businesses that hire veterans or disadvantaged workers; and more. In some cases these credits can even result in a net refund rather than just lowering what you owe in taxes!
Taxes can be complicated but understanding them doesn’t have to be overwhelming! Follow us @y2solutionconsulting to stay up-to-date on filing requirements. We can also help you maximize deductions and credits available to businesses owners like yourself, and minimize your tax burden while still remaining compliant with IRS regulations.