Small Business Owners: How To Handle Your First Tax Return
How do I calculate my taxes?
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Starting a small business seems like a great idea at first. You get established, and everything’s going smoothly at first. Suddenly, you realize that it’s time to file your tax return. Once you realize the extent of what you’re up against, you quickly start to regret your business aspirations.
But never fear! Tax returns aren’t all that scary when you get down to it. All it takes is the right knowledge and preparation in order to complete them successfully. Let’s go through the tips you need.
You need to get your head around the different types of tax forms. Filling in the wrong one will cause all sorts of hassle. You’ll find that the IRS makes it as easy as possible for you to locate the form you need. You can find all of this information online with a basic Google search. If you fill in the wrong form, you’ll soon be notified. Unfortunately, if you’ve already passed the deadline, this can pose a few stumbling blocks.
What Are The Deductibles?
If you don’t know what you can and can’t deduct, there’s a lot you need to learn. Ultimately, we can’t tell you everything you need to know in a basic article. However, start with things like office equipment, and classify them correctly. Supplies like pens and paper should go into one category. Bigger equipment like PCs and laptops can go into another category. This is so you can ensure you get the right deduction amount for those high-value pieces of equipment.
Don’t Forget Travel Expenses
If you’ve had to travel for any reason as part of your business, you can claim for that, too. You’re also allowed to deduct lodging and tips, as well as 50% of your meals for business days. Make sure you keep a record of everything.
Are You Working From Home?
This is a big question to ask yourself. If you’re working from home, you’re eligible for even more deductibles than usual. This is because you’re using your own utilities for business purposes. You can claim for electricity and heating bills, for starters. You can do the same for things like internet costs, too. You might not get the full amount (you obviously use them for personal use, too), but you’ll get a fair deduction.
What If You Miss The Deadline?
Uh, oh! If you miss the deadline completely, you might have some explaining to do. In this case, you’ll want an experienced professional to take care of your tax strategies going forward. They’ll do their best to fight your case and ensure you don’t suffer from penalties. If the deadline hasn’t arrived yet but you’re running out of time, you can file for an extension. This means that you’ll still have to pay on time, but you’ll be given longer to file the return.
As long as you follow the rules to the letter, your tax return shouldn’t be a big concern. Most importantly, you’ll want to get started as early as possible. It’s a laborious process, so don’t leave it until the last minute!
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