The April 17, 2018 tax filing deadline will be here before you know it, and there’s nothing more stressful than not having all of your company’s financial paperwork and tax forms ready. This is the deadline to file “C” corporation tax returns (Form 1120), and individual tax returns (Form 1040). In addition, April 17th is the day you need to make your first 2018 estimated quarterly tax payment (if you pay your business taxes each quarter). Although time is running out, there are things you can do to make tax time a breeze. Check out the helpful last-minute tax tips in this Balboa Capital blog post.
1. Gather your financial documents.
The first step in getting ready for the tax deadline is gathering all the necessary financial paperwork. If your business uses cloud-based accounting software, you can complete this step rather quickly, as your income, expenses, and sales transactions are just a few mouse clicks away. Next, you will need hard copies (or electronic copies) of all of your company’s receipts so you don’t miss out on potential tax deductions. There are numerous expenses that can be deducted, so don’t throw any receipts or invoices away. Common businesses expenses include advertising, travel, equipment depreciation, business insurance, professional fees, office supplies, and office rent.
2. Get the correct IRS form(s).
After you collect all of your company’s financial documents, it’s time to get the appropriate IRS form. This will be determined by the type of legal structure your business has. If you operate as a sole proprietorship, you will need a Schedule C form, which will be included with your personal income tax return. You can use the Schedule C form if your business is a limited liability corporation (LLC), but you will need to include Form 1120 if you treat your LLC as a corporation. If you converted your LLC to a “C” corporation in 2017, there are steps you need to take to avoid paying too much in taxes, or not paying enough in taxes, the latter of which can result in costly tax penalties.
3. Work with a licensed accountant.
Having a licensed accountant handle your company’s taxes is recommended whether you are filing early, or at the last minute. That’s because a licensed accountant is familiar with the very latest tax laws and tax codes as they relate to small businesses. As a result, you can save money, and your deductions can be maximized. Plus, a licensed accountant knows how to prepare your tax return in adherence to IRS guidelines, which can help prevent your company from being audited down the road. If you file your company’s taxes without the help of an accountant, you will most likely find yourself working long hours with mountains of paperwork. The multitude of line items on your tax return can be confusing, and you can’t afford to make any mistakes.
4. Still need time? Get an extension.
If you’re just too pressed for time to get your taxes done by April 17th, don’t worry. You can request an automatic extension from the IRS. Work with an accountant to ensure that you file the appropriate IRS form on time, and that all of the required information is provided. Failing to do this can result in your business receiving late fees and/or fines. Lastly, making scheduled payments to the IRS is also an option if you can’t pay what you owe right now. Discuss this with an accountant to learn how IRS payments plans work, and to determine if they are right for you.