Tax season doesn’t need to mean stress for you as a home service business owner. Doing taxes for your business can be just as simple as having the right forms ready and using the best home services business software to get the job done. So if you decided this is the year you’re doing your taxes yourself, then this is the guide you need.
Here are three ways to make tax season easy and worry-free this year.
Decide how you’re filing
You’ll need different forms depending on the type of business you have. If you have an LLC or are the only owner of your business, you’ll want to start by reporting your business income. This will be noted on Schedule C with your tax return.
If you run a different kind of business, such as a corporation, you’ll want to take advantage of Form 1120 and Form 1120-S. As an S Corp, you’ll be using form 1065 if you have more than one member as a part of your LLC or a partnership.
Filing by yourself
Filing your taxes by yourself is one of the riskier ways to do your taxes, but you’ll save money and learn a valuable skill you’ll use year after year. Using third-party software like TurboTax is one of the easiest ways to file. Although it is one of the many paid options, they offer plenty of support and even integrate with QuickBooks.
In addition, there are other ways you can file with third-party software such as Taxact or USA.gov. Make sure you do your research when deciding which is the best decision for you and your business.
Filing with a third-party or accountant
One way you can make filing your taxes even easier is to file with an accountant. Not only will you have an expert with money, but you will have someone who is an expert in tracking your spending throughout the year.
Many third-party websites offer packages where they can help you file, or they can do the filing for you. Taxact offers custom packages based on the type of business you run. They also offer support and top security for all your tax needs.
Get your documents ready
Whether you let your accountant file your business taxes for you, or you do them yourself, you’ll have to get your documents in order. Just make sure you have these five things ready, so the process can run smoothly:
- Vehicle usage: Operating expenses on vehicles used during the year, millage rates, and mileage deductions
- Business expenses: Utilities, maintenance, and repairs at your home office or company building
- Property taxes: If you have them, you’ll need a form 1098
- Capital assets: Assets sold or owned by your business and capital gain
- Financial statement: Balance sheet and income for the year
Keep a record of your taxes while filing
For your financial documents, you’ll want to keep your records together for the past three years. For other documents, it’s smart to have those on file either digitally or kept in a home office.
To figure out what to keep, you’ll need to save documents that report the amount you made on your return. The W-2 and 1099 forms are the most important for your employees to keep on hand for their taxes. If you choose to itemize your deductions, you’ll want to keep invoices, checks, and brokerage statements.
Business owners need to have the right forms and records ready for tax season. This can make sure that all necessary documents are filed correctly with paperwork that complies with local and federal regulations.
Stay updated on other resources like popular accounting software solutions or free online filing applications that might help when it comes to filing taxes this year. In addition, don’t forget the importance of hiring a professional accountant if ever in doubt – they’ll ensure accuracy and tax deductions you might have missed otherwise!
So take some time out of your day to get familiar with taxes now and remember these tips, because a solid plan could save you lots of headaches come April.
