How To File Business Taxes: A Step-By-Step Tax Prepration Guide
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Commerce Puzzle

Commerce Puzzle

How To File Business Taxes

A Step-By-Step Guide

Tax Preparation Intro

Taxes. The one common denominator for entrepreneurs and citizens across all of The United States. Whether you are a veteran business owner, or you are reading this because you feel like you are in over your head with your startup, this article has something for everyone. Below, we will cover tax return deadlines, must-haves when filing, tax deduction information, and much more. At the end of the step-by-step guide to tax preparation, feel free to utilize one of the tax filing services linked below to get started. This article is strictly for free information, and we do not get a commission for any business that takes place with the companies below.

Filing Forms & Deadlines

Although you will be filing taxes in 2019, it is important to remember that you are filing for the 2018 tax year. Your business structure dictates the tax forms that you will use to file, as well as your specific deadline and extension date. Follow the guide below to narrow down your tax form by your business structure:

Sole Proprietorship

1 Owner
Form 1040 (Schedule C)
  • Due: April 15th
  • Ext: Oct 15th

Single-Member LLC

1 Owner
Form 1040 (Schedule C)
  • Due: April 15th
  • Ext: Oct 15th

Partnership

2+ Owners
Form 1065 +(Schedule K-1)
  • Due March 15th
  • Ext: Sept 16th

S Corporation

1+ Owners
Form 1120S + (Schedule K-1)
  • Due: March 15th
  • Ext: Sept 16th

C Corporation

1+ Owners
Form 1120 + (Schedule K-1)
  • File: Month 4 After Fiscal Year
  • File: On 15th Day

Before You File

We created this guide to help business owners who intend on preparing taxes on their own. With that said, even those who pay to have their business taxes professionally done find themselves having to track down documents. The process of filing can be mentally draining, especially when it is postponed due to missing paperwork. To ensure that everything goes as smoothly as possible, make sure that you have access to the following documents as you are filing:

– Articles of Incorporation
– Previous Tax Return
– Business Account Statements
– Account Records
– Annual Payroll Report
– Vehicle Usage & Maintenance
– Credit & Debit Card Records

If you are able to access the documents named above while you are filing taxes, this is all of the information that you will have access to:

  • Business Accounting Software
  • Federal Tax ID
  • Date of Incorporation or Registration
  • S Corp Election Date
  • Business Code Number and Activity Overview
  • Inventory Reports
  • The Tax Years First Balance Sheet
  • Shareholder or Partner Information
  • A List of Officers
  • Officer Contact Information
  • A List Of Shareholders and Ownership Percentages
  • Incorporation State
  • Profit and Loss Statement
  • Balance Sheets
  • Spending Statements
  • Miles Driven For Business
  • Personal Miles Driven
  • Commuting Miles Driven
  • Spending Records (Debit)
  • Spending Records (Credit)

Your Business Structure

Sole Proprietorship & Single-Member LLC

If a business is registered as a Sole Proprietorship or a Single-Member LLC, it serves as an extension of whoever is running the business. In other words, you file your business taxes via Schedule C, and this is turned in with the standard individual FORM 1040 filed by everyone. Due to this, the deadlines and due dates follow the dates associated with nonbusiness owners standard FORM 1040. The year-end is December 31st, while Schedule C and FORM 1040 have a deadline of April 15th.

Partnership & Multi Member LLC

Filing taxes for a partnership can involve a few more moving parts, but it is very doable. It is important to remember that FORM 1065, the form used for Partnerships and Multi Member LLC’s, is an information return. When you file FORM 1065, tax will not be paid or calculated from that specific form. Because of this, Schedule K-1 Forms are turned in with FORM 1065 to determined individual income/loss for the year for each partner. Beyond this, taxes owed by the business are paid by individual partners or LLC members. Concerning who pays what, this is determined in the terms and conditions of the partnership or multi-member agreement.

S Corporation

If your business is registered as an S Corporation, you will be filing an information return. S Corps use FORM 1120S for their information returns. With FORM 1120S, you will be required to turn in your Schedule K-1 as in the example above. Although a majority of S Corporations technically have one owner, in the case that yours does not, all co-owners are expected to file according to the steps above.

Note: Multi-Member LLC’s have the option to elect to be taxed as either an S Corporation, or Corporation. If this option is not exercised, the default for the IRS is to assume that your business is filing as a partnership.

C Corporation

C Corporations, simply referred to as Corporations, have the luxury of choosing any date that they want as their year-end day. To make the process easy, most corporations pick the end of a quarter. After the date is determined, corporate tax returns are due on the fourth month and fifteenth day immediately following the year-end. For example, if March 31st were the year-end, corporate taxes would be due on July 15th.

Tax Preparation Software

There is no way around it; taxes are confusing. Thankfully companies have been battling it out for decades, doing their best to offer consumers the best tax preparation software possible. While there are plenty of options available on the market, TurboTax, TaxAct, and H&R Block remain in the highest demand. From a software development standpoint, all three companies put out a similar product pertaining to the basics. They really differ in value when you consider the added extras. We recommend exploring all three of their websites before making a decision. Here are the three most popular tax prep tools heading into 2019:

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4.0
4/5

TaxAct

Self Employed Forms
$ 49
95
  • 7 Year Access To Returns
  • Free Tech Support
  • Price Lock Guarantee
3.6
3.6/5

H&R Block

Self Employed Forms
$ 79
99
  • Upgrade For Access To Returns
  • Upgrade For Tech Support
  • No Price Lock Guarantee
how to file business taxes colorado springs commerce puzzle turbo tax
4.0
4/5

TurboTax

Self Employed Forms
$ 89
99
  • Upgrade For Access To Returns
  • Upgrade For Tech Support
  • No Price Lock Guarantee

Getting Help

Filing taxes on your own can be a scary venture. Utilizing available resources when you have a question or two can save a headache, and more importantly; money. The IRS website has all of the available forms in PDF files, ready to print. Beyond that, they also have various sections dedicated to frequently asked questions and guides on how to use and interpret specific documents. If you do not find what you are looking for on the IRS website, your tax software may come with customer support. Customer support time and performance varies by company, but all have been deemed helpful by consumers. Good luck filing your 2018 business taxes, we hope the information above helps out. You can do it!

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