This year’s tax season got started late because of the “fiscal cliff” legislation that was passed in January -; meaning that even more people waited until the last minute to file. As a small business owner or self-employed individual, you want to get through tax season as painlessly as possible, which you can do if you follow the suggestions given below.
Determine Whether it Makes Sense to File Your own Taxes
The Internal Revenue Service has free help for those who want to do their own taxes, which can be ideal if you don’t have any deductions and if your return is relatively simple. However, as a small business owner, your return may be more complex because of depreciation, expense deductions and pass-through income. These complexities mean that you’ll be much better off hiring Robert A. Woloshen CPA PC for this year’s return.
Be Ready
You can make tax time easier on your preparation and yourself if you do some calculations before your appointment. Most tax pros give clients a document that contains information from previous returns; use that as a base and do as much of the number crunching as you can. If you are using a new tax prep service, bring copies of the last three years’ state and federal tax returns.
Gather Your Paperwork
It may seem obvious, but some clients show up to appointments without vital papers such as 1099s, W-2 forms and corporate returns. If you have your company’s balance sheet and income statement, bring them, as well as receipts for corporate assets purchased within the last tax year. If you have a child in college, bring their 1098-T form (tuition statement). This form can be used to earn a tax credit of up to $2500 for qualified expenses.
Find and Claim Deductions
If you only use your home office for business purposes, you may qualify for a deduction. Keep a tally of how much is spent on your mortgage, utilities, upkeep and homeowners’ insurance. If your personal vehicle is used for business, keep a record of how much you spend on maintenance, repair and fuel.
As you’re assembling your records, make a note of anything you’re unsure of -; and be sure to mention it to your Income Tax preparation professional at your appointment. If you’re a small business owner, don’t try to do your own taxes; take your records to a qualified tax professional.
