When it comes to small business and taxes, it can feel pretty daunting knowing how to file taxes. It’s important that when you own your own small business, you know a thing or two about small business taxes and management. If you are just now starting out as a small business owner and you need help on how to file your taxes, here is a step by step guide on how to file your small business tax.
- Assemble Business Earnings and Expenses: Before you file your taxes, you will need to gather all of your documents that have to do with the earning and expenses that your business has been through.
- Choose the Correct Form: Based on how you operate your small business is going to depend on the form you need to file your taxes. If you are a sole proprietor or a limited liability corporation (LLC), you are going to need different forms to fill out.
- Fill Out Correct Form: If you are a sole proprietor, you will fill out a Schedule C form, but if you are an LLC, you will want to fill out a Form 1120.
- Know When To File: Different forms are going to have different deadlines, so you need to know when the deadline is for your particular form so you aren’t late on filing your small business tax.
Now that you know how to file your small business tax, you might have a lot of other questions such as, “How do small businesses pay less taxes?”, “Will I get a tax refund if my business loses money?”, or “What percentage of taxes does an LLC pay?” to learn more about your small business tax, keep reading through this blog to get in-depth answers to your most frequently asked questions.
What is the Tax Bracket for a Small Business?
Taxes are already complex, but they can be more so when you own a small business. This is because taxes are very detailed and require a lot of information. In the year 2019, you will start to see the effects of the 2018 tax reform bill, which will not affect anyone until taxes are filled this year. The more you know about small business tax, the more comfortable and confident you will be in filing your taxes. So what tax bracket do small businesses fall under? It’s important to note that depending on the type of business you run will depend on the total taxes you will pay. Another thing that affects how much you pay for small business taxes is the state where your business is operating. According to Fundera, sole proprietors will pay 13.3%, C corporations pay 17.5%, S corporations pay 26.9%, and small partnerships pay 23.6%. If you need more small business tax examples, you will need to get in touch with a professional for more information.
How Do Small Business Tax Deductions Work?
In order to get the most out of your small business, it’s important to know what kind of tax breaks you can receive. If you are looking to decrease the amount you pay on your taxes, then you must be familiar with the kind of tax breaks you can write off. Below are some things you are able to deduct from your small business tax.
- Office supplies
- Office furniture
- Use of your car for business
- Travel expenses
- Business meal expenses
- The cost of business calls
- Computer software
- Electronics like computers, tablets, and smartphones
- Business repairs like soffit repair
- Home offices
- Cost of renting an office space
- Different types of insurance that pertain to your business
- Marketing and advertising
There are a ton of ways that you can benefit from business tax deductions, but the only way you will know about these types of deductions is if you talk to a professional.
When Are Small Business Taxes Due
As a business owner, you have to make pretty frequent tax payments. Because of this, it’s important to know when taxes are due. Depending on what kind of business you have or if you hire employees will depend on what kind of taxes you have to file. If you have an S corp or partnership, then your taxes are going to be due on March 15, 2019; if you file corporate tax returns (these types of businesses would be a sole proprietor and LLC) is due April 15, 2019. It’s important to note that not every year is going to have the same exact date. You need to check every year to determine when your small business tax is due.
If you are interested in working with a tax consultant, call R Moon Consulting at (214) 382-2964! We are a professional consulting firm who is able to help with small business tax, training, and more. For small business owners who think that they need a consultant to help them with a wide array of services for their business, we are the consulting firm to call! Call us today and one of our consultants will walk you through our tax consulting services.