First-Time Tax Filing Procedure 101
Is it your first year running a small business? Are you concerned about whether you’ll have the time to learn the ropes in time for the upcoming tax season when you will need to file your business taxes for the first time ever? Professional tax consultants can always lend you a helping hand, whether you’re interested in forming and S corp in California or want guidance in relation to the pertinent tax filing procedure.
Consult a professional to find out how to lower your business taxes and whether the advantages of a certain business structure type outweigh any disadvantages.
How do I do my small business taxes?
To file your business taxes, you will need to take the following steps:
- Collect all your business records.
- Determine the applicable IRS form.
- Fill out the form.
- Be mindful of the deadline.
However, business owners filing for the first time who want to be absolutely certain they’ve done everything in a correct and timely manner prefer to leave it to a tax professional to prepare their taxes.
What IRS form do I use for an S corp?
If your business is structured as a regular corporation, you would need to file Form 1120, while running an S corporation would require you to file Form 1120S. Form 1120S goes by the name US Income Tax Return for an S Corporation. The form includes Schedule K-1, a copy of which should go to each shareholder. The due date for filing your S corp tax return is March 15.
What does it mean to get a tax break?
A tax break means the government is giving you a reduction in taxes. A tax break can take many forms. You can:
- Claim deductions
- Have income excluded from the tax return
One of the perks of running a small business is that you are in control of the tax breaks you can choose for tax deduction. The trick is that many small business owners are unaware of this, which is why discussing this with an experienced tax expert beforehand is always a smart call. If you have a well-thought-out course of action, you could end up with impressive savings.
Can a small business get a tax refund?
Your small business may be eligible for a tax refund, but how will you know? Whether or not your small business can get a tax refund depends mostly on what type of entity it is and the type of taxes you pay. Present your tax consultant with all your business documents and records so they can take action to ensure you are taking full advantage of your tax refund opportunities.
How to maximize your tax refund?
Taxpayers are known to overpay their taxes on purpose. By having a higher-than-required amount withheld from their paychecks, they ensure that the refund they’ll get in the spring is a hefty sum of money. But is this really the best way to get a higher tax refund?
Overpaying your taxes can backfire in the sense that you’ll end up reducing your working capital. Here are some convenient alternatives you can try:
- Check if you’re eligible for tax credits.
- Check your personal bank/credit card statements to see if you made any deductible business-related purchases.
- Prepaying your upcoming expenses can pay off: you get to save on costs later on, as well as reduce your taxable net income.
- Reward your employees with fringe benefits as these incentives can be deductible as well. Also consider offering your employees a 401(k) plan.
- Keep track of your business travel mileage.
- See if you’re eligible for home office deduction.
Forming an S corp in California? Count on us!
Here at David York’s Tax Service, we provide a vast range of services of value to you and your business, including assistance with the tax filing procedure. We will file your taxes in an accurate and timely manner so you can make the most of any business tax refunds you may be entitled to. Reach out to us here in San Diego’s Mission Valley and count on us to make your needs our top priority, even if you schedule a last-minute appointment!