Filing Your First Small Business Tax Return This Year? 3 Moves to Make Now

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Filing taxes can be complicated when you own a business. Read on to see how you can make the filing season go more smoothly. [[{“value”:”

The 2024 tax season officially kicked off in late January. And 2023 returns are due on April 15 this year, which is the standard tax-filing deadline.

Filing taxes can be complicated even when you’re a regular old salaried employee. But if you own a small business, the process of filing a tax return can get a lot more cumbersome. So if this is your first year filing a small business tax return, here are some key moves to make right now.

1. Organize your records

The upside of being a small business owner from a tax perspective is that you get to deduct certain costs associated with earning a living. However, you may have to provide a lot of documentation to claim the right deductions, so now’s a good time to start organizing your paperwork and records.

Specifically, you’ll want to make sure you have records of:

Business purchases, from office supplies to licenses and feesBusiness-related travelPayroll expensesRent payments, if applicableEstimated tax payments you may have made to the IRS along the wayRetirement plan contributions, if applicable

2. Find help

Mark Steber, Chief Tax Information Officer at Jackson Hewitt Tax Services, is a big fan of getting help with taxes across the board. “I almost always recommend people work with a tax professional rather than risk filing a tax return by themselves,” he says.

However, if you own a small business, it’s even more important that you find a good accountant to assist with your taxes. There are a lot of nuances and rules that apply to small businesses specifically, and you need to make sure you’re compliant to avoid issues with the IRS.

Perhaps you currently employ a bookkeeper to manage your business’s bank account. But that person may not be a CPA or tax professional, which means they may not be well-equipped to assist you in filing a small business tax return. If you’re not sure of your employee’s credentials, have that conversation sooner rather than later in case you wind up needing outside help.

3. Set money aside in case you owe the IRS

If it’s your first time filing taxes as a small business owner, perhaps you’ll end up with a refund. Or you could end up owing the IRS money. It’s hard to know.

In the coming weeks, you may want to cut back on business-related expenditures and instead funnel more money into your company bank account in case you end up with an underpayment on your hands. That way, you may be in a stronger position to pay the IRS what you owe directly and avoid the hassle of a payment plan and a tax debt hanging over your head.

Filing small business taxes has the potential to be stressful — especially if you’re new to the world of owning a small business. So do yourself a favor and get organized now. Gather your paperwork and line up help before the April 15 filing deadline gets much closer. Not having to rush through the filing process is another way to help it go more smoothly.

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