The weather is changing, people play pranks on each other on the first of the month and we are all going through our records from the past year, organizing papers, receipts and notes. That’s right, it’s April and that means tax season. Taxes can seem daunting to anyone, but when you’re a business owner, things can seem even more complicated. That’s why we sought to make tax season a bit more manageable. We hope to lend some clarity with our simple tax season checklist for business owners.
The structure of your business affects which forms you should be filling out for your taxes. Whether you run a sole proprietorship, an LLC or a corporation, you may have to file your income and expenses on a specific form that differs from that which another business structure would be required to fill out. For example, sole proprietors and LLCs use a Schedule C on a Form 1040 while a corporation would use a Form 1120 or Form 1120S.
As a business owner, there are many possessions you can be marking down as deductions that you might not have considered. For example, did you know that if your home office is a space dedicated solely to your business, you can write it off as a deduction? Things like software and even furniture being used for business purposes may also be counted as a deduction. Do some research and find out whether or not you have some of these items before the next time you go to file your taxes – you may be surprised!
While it is all well and good to know what qualifies as a tax deduction, it is also important to know the necessary requirements that must be met in order for it to qualify. To reiterate a prior example, if your home office is being used solely for business purposes, it can be written off as a tax deduction, but in order for the office to qualify, it truly must be separate from all personal use. Another requirement to keep in mind is regarding travel expenses. While you can write some of these expenses off as deductions, you can only claim 50% of meals while traveling. Make sure you explore these necessary requirements as you prepare your tax forms this season.
This is a no-brainer, but it is worth mentioning because of its importance! Tax Day 2017 is April 18th for individuals and corporations. Make sure that you take note of this deadline. Perhaps set an appointment on your calendar with reminders, or try the old fashioned way by writing notes and sticking them all over your house and car; whatever works for you. Just make sure that you are aware of important due dates so they don’t sneak up on you and you can be as prepared as possible. Keep in mind that there are plenty of other dates to be aware of besides April 18th. Depending on what kind of business you own, you will need to meet other preliminary deadlines. For a comprehensive calendar of tax deadlines, click here to go to the IRS’s website.
It’s important to stay ahead of the game when it comes to taxes. Don’t forget to select the right forms, research and know what qualifies as a deduction and stay on top of due dates. Happy Tax Season!
DISCLAIMER: This post provides general information related to taxes. Lindbergh is not a law firm. This information is not intended as a substitute for, and should not be relied upon as, legal advice. It is provided for general educational and informational purposes only. Although Lindbergh strives to ensure that its content is accurate, it makes no guarantees. All legal inquiries should be directed to intellectual property counsel in your State or jurisdiction. Lindbergh is not responsible for any errors or omissions in the content of this post or damages arising from the use of this information under any circumstances.