How to Do Your Taxes for Your Small Business?

October 25, 2019

Filing federal taxes for your small business in California doesn’t always have to be complicated. The trick is to keep meticulous records. They’re necessary whether you file on your own or use a Los Angeles Accounting service. Here are a few other things to know.

Legal Structure of Your Business

The tax forms you use depend on the legal structure of your business. For instance, sole proprietors should use their personal tax forms. Their business income is added to other income such as investments and dividends. On the other hand, a C corporation pays taxes on the company level.

The IRS website explains the forms that each type of business needs for filing and links to them.

Tax Deductions

Take advantage of deductions for startup costs and other expenses. You may be able to write off costs related to employee training, advertising, insurance and much more.

Professional Assistance

Los Angeles Tax Preparation services are able to help your small business do its taxes professionally and efficiently. Taxes can get overwhelming fast, even for sole proprietors who have a relatively easier time. Without professional assistance, you risk missing out on many valuable deductions. You might also make mistakes paying throughout the year or with paying various other taxes such as sales, payroll or excise.

One more thing: It’s helpful to have an established relationship with a Los Angeles Accounting firm in case you need help with audits, real estate taxation, business incorporation or other issues.

Software Programs

Software programs such as TurboTax, TurboTax Business and TaxAct could come in handy. You pay a fee to use them, and they still require precise documentation. Some programs download your information from QuickBooks into your tax returns.

The approach your small business should take depends on your accounting and tax preparation expertise, and how much time and money you’re willing to spend on tax prep. Consider using an accounting firm to maximize your time and efficiency.