When running a small business, you need to stay ahead of the game on taxes for your company and employees.
Taxes can be stressful. But there are ways to prepare so you don’t get overwhelmed.
By understanding the basic tax principles and what taxes apply to your company based on its structure, you can avoid any surprises that could cost you.
Marking the important dates on your calendar and using the right tools can also help make filing your taxes a smooth process.
Read on to learn more about staying ahead of taxes for your small business, including:
- Tax basics to keep in mind
- Marking your calendar with important dates to know
- Using tax resources and tools
This article is for informational purposes only and should not be used as tax or legal guidance. Seek out a lawyer or accountant for more information on your 2021 taxes.
Know the Small Business Tax Basics To Help You Stay Prepared
The best way to not get overwhelmed by your taxes is to familiarize yourself with the basics that apply to your company. If you miss a deadline or don’t realize your company’s structure requires certain forms, you could end up paying fees and suffering penalties.
Every business owner needs to know the taxes that apply to their company, which could include:
- Income tax
- Estimated taxes
- Self-employment tax
- Employment taxes
- Excise tax
The legal structure of your business also impacts the forms and tax processes. So a sole proprietorship would file differently than an S or C corporation. If your run an LLC, know what applies to you.
If you change your business structure or decide to expand by adding employees, you need to understand how that impacts your business.
Furthermore, each state has different requirements, and the tax laws are currently changing. So whether you have an accounting department or run your business by yourself, you need to stay afloat with changes and how your business dealings affect your taxes.
For example, 2020 saw several government relief measures and the CARES act, which could complicate taxes for small businesses.
Don’t get blindsided when tax time comes. Take the time to familiarize yourself with the tax basics to help you stay prepared.
Mark Your Calendar With Important Tax Dates To Know
Plot the important tax dates on your calendar, so you know when you need to file. And it’s a good idea to file well before the deadline. So if it does take you longer, you have a buffer period.
Depending on your company, you’ll either file an annual or quarterly tax return.
Annual taxes are due April 15, 2021. Those that filed extensions will need to file by Oct. 15, 2021.
Quarterly payments are due based on the payment period:
- Taxes for the Jan. 1-March 31 pay period are due April 15
- April 1-May 31 are due June 15
- June 1-Aug. 31 are due Sept. 15
- Sept. 1-Dec. 31 are due Jan. 15 of the following year
Use Tax Tools and Resources
There are many options to help you stay organized and understand your taxes better. The IRS’s website might seem overwhelming, but it’s packed with everything you need and resources for small businesses.
You can also try other assets, such as the U.S. Small Business Administration.
There are many tools available that can help you, such as software you can use to keep your documents organized and prepare your taxes. No one wants to sort through a shoebox of receipts come tax time.
Take the time to find the best program for your company and stay consistent.
It’s easy to feel stretched thin and like you have to take on every task as a small business. But delegation is an integral part of business, and filing taxes is a complicated task that is often better left to the professionals.
Hiring an accountant can be a blessing for your business and well worth the money for peace of mind.
Taxes don’t have to be a last-minute scramble. Instead of ignoring them and hoping they go away, arm yourself with the information you need to anticipate all of your tax needs.
Understanding your company’s structure and how that affects your tax schedule is critical. Also, be aware of how any government relief will impact your taxes. Keep track of important dates throughout the year and supply yourself with resources available for your business.
Do your company and employees a favor by staying ahead of the game and staying prepared for taxes.
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