The tax deadline for businesses to pay corporate tax returns will be here soon and it’s never too early to start getting prepared. Find out how to get your small business tax ready before the business tax deadline 2021.
What Kind of Tax Form Do You Use?
When you’re filing small business taxes for the first time, it can be confusing to know which form to use. Here are the forms that you need for your 2021 tax return depending on your type of business:
- LLCs/ LLCs Taxed as Corporations: Form 1120
- Sole proprietor/Single Member LLCs: Schedule C on Form 1040
- S Corp: Form 1120-S
- Partnerships/Multiple Member LLCs: Schedule K-1 on Form 1065
When Do You File Payroll Taxes?
When you’re determining how to pay payroll taxesyou have to make quarterly payments using Form 941. The payments are due on the last days of January, April, July, and October. On Form 941, you record information like the wages you paid your employees and taxes withheld from your employees as well.
What Tax Form Do You Give Independent Contractors?
If you use independent contractors for freelance work for your business, you have to send them a 1099 form so they can file their income taxes. If your independent contractor needs a 1099 extension, your freelance worker has to file a Form 8809.
Look for Tax Deductions and Credits
After paying your payroll taxes, see if you qualify for any business deductions. Paying your employees’ salaries is usually tax-deductible. Some other deductions that can help you save money on your 2021 tax return include using your home office, renting equipment, and making charitable contributions.
If you provided health insurance or childcare to your employees, you may be able to claim those payments as tax credits. There are many other credits that you may be able to claim before the business tax filing deadline.
Get Your Documents Organized
After getting your payroll taxes in order, another pivotal part of getting ready for the tax filing deadline is getting all your other documents properly categorized. You also need to gather your balance sheet, income statement, last year’s tax returns, and other necessary documents together in a spreadsheet or even an old-school folder. You should also have your taxpayer identification number ready to report to the IRS.
How to Avoid Tax Penalties
As a small business owner, it’s all too easy to make mistakes when preparing your taxes. Here are two of the most common tax mistakes that business owners make—and what you can do about them.
- Underpaying taxesSmall business owners will incur tax penalties if they underpay taxes if they don’t pay enough taxes through withholding and estimated tax payments. One way to avoid this penalty is to send in quarterly estimated tax payments.
- Mixing up personal and business expensesAnother tax penalty that can hurt a small business owner is to pay for business expenses on a personal credit card. This error can lead to improper deductions on your taxes. Avoid this confusion by having a separate business credit card.
Negotiate with the IRS if You Can’t Make Your Payments on Time
Although you want to be as prepared as you can and avoid tax penalties, there are times when you may need extra time preparing or paying your taxes. If you can’t make all your payments or you need an extension, you can ask the IRS for help in three ways.
- Enter a payment installment agreement with the IRS.
- Enter a tax debt settlement agreement.
- Postpone your IRS payment.
Find a Qualified Bookkeeper
If you’re too busy or don’t have the right experience to take care of all these issues, you can always hire a bookkeeper. A bookkeeper can easily help you find tax credits that you may have missed. They can also help organize all your documents so you can meet the business tax filing deadline.
Experienced bookkeepers at Remote Books Online can help you get tax-ready in just seven business days. Contact RBO or talk to an agent at (800) 583-0148 to request a quote and find out how to get one month of bookkeeping free. With Remote Books Online, you can let dedicated bookkeepers take care of your taxes to give you peace of mind.