Our team at Pathways Consulting understands running a small business takes more time, money, and energy than expected. From payroll to taxes, there are multiple behind-the-scenes tasks you will be faced with. Our team wants to share with you a few tax ideas to get your business taxes under control!
Let's start off with the basics: Always report and claim the income your business earns. While this may seem simple and something you would always remember, there are cases where forgetting this occurs. Make sure this is not your business by claiming 100% of your income made.
Always Keep Your Records
Keep track of your business’ paper trail by keeping records. This means keeping up throughout the entire year, not just waiting until tax season to get things organized. Not only could negative consequences occur due to lack of organization of records, but you could also be missing possible deductions!
Be sure to classify your company as the proper LLC, corporation, or sole proprietorship. Understanding the classification of your business will assist you in preparing and filing your taxes to the IRS.
Understand Net and Gross Income
Make sure that what you are selling is not costing you more to create. Often times small businesses do not take into consideration the difference between net income and gross income. If something is costing you more to create, you may not be profiting as much as you believe you are. Take into consideration the expenses you pay while creating your product.
While these are just some tips on how to keep your small business running efficiently, Pathways Consulting is here to answer any questions you may have regarding taxes. Contact us to get your answers!
Individuals who are either sole proprietors or S corporation shareholders will benefit from making estimated tax payments. Another great key to estimated tax payments is that if a corporation is expecting to make $500 or more when their tax return is filled.
Some do not have to pay estimated tax, however. Those who meet the following three requirements will fall into this category;
For those who must file estimated tax, form 1040-ES is helpful in figuring out what the amount will be. The calculations include the expected adjusted gross income, taxes, deductions, taxable income, and credits for the year. It is always a great idea to use the information you have of the previous year's taxes to assist you!
Now that you know what needs to be added together, when do you pay your estimated taxes? There are four payment periods with online payments, phone payments, or mail payments. Electronic is always the easiest.
If you need assistance in understanding, completing, or filing your estimated taxes, we are here to assist you! Schedule an appointment to meet with one of our tax experts!
The Pathways Team