How to File Your Business and Personal Taxes Accurately

How to File Your Business and Personal Taxes Accurately

Even though filing your personal and business taxes can be an overwhelming task, it is a fundamental responsibility of being a reliable business owner and a good citizen. You can ensure that you are paying the correct amount of taxes and avoid any potential IRS issues or penalties by following the right procedures and keeping your financial information organized. Not only do you ensure compliance with IRS regulations by correctly filing your taxes on time, but also maintain a smooth operation of your business. When it comes to filing your personal and business taxes, learning the best practices can make the process smoother and easier.

Practices to Make Your Tax Filing Experience More Efficient

Here are some practices to follow to make your tax filing experience smoother: Learn Your Tax Filing Status Identifying your tax filing status is one of the most crucial steps you can take to file your personal and business taxes properly. The tax rate and deductions you are eligible for are determined by your tax filing status. These are the five main tax filing statuses:

• Single
• Married and filing jointly
• Married and filing separately
• Head of household
• Widow or widower with a dependent child

You may be required to pay federal, state, and local taxes, depending on the type of business you run and where you live. Here are some common taxes businesses might be eligible to pay:

• Sales tax: A business that sells goods and services is required to collect and pay sales tax. Sales tax can depend on the area of your business and the kinds of goods and services you sell.
• Income tax: Income tax is a tax on the profits that a business makes. Income tax is determined by the scale of a business and the tax bracket it applies to.
• Property tax: People who own property for business are required to remit property taxes to the government.
• Payroll tax: Payroll tax applies to businesses that hire employees, which also includes their social security, medicare, and unemployment insurance taxes.

Ensure Proper Record Maintenance Collecting and organizing the required documents and records is essential for filing your taxes accurately. To have the right information ready and assembled, you need to make a habit of meticulously maintaining your records throughout the year. Proper record maintenance comprises tracking and organizing all records of your income and expenses and identifying any deductions or credits you’re eligible for. If you find record maintenance difficult to maintain throughout the year, make sure to keep track of the following documents:

• A W-2 form if you’re an employee
• A1099 form if you’re an independent contractor
• Business expenses receipts
• Other various documents regarding business expenses, profits, etc

Identify Your Business Structure How you file your business taxes is determined by your business structure. Whether you’re a sole proprietor or a single-member LLC, your company revenue and costs will be reflected on your personal tax return. If you have a partnership or a multi-member LLC, you must file a separate business tax return (a 1065 form) and provide K-1 forms to each of your partners. However, if your business is a corporation, you must submit a corporate tax return using either 1120 or 1120-S forms

A Stress-Free Tax Filing Experience

Countless things can go wrong when filing your taxes on your own. Whether choosing an incorrect tax form, skipping some vital financial information, or missing the tax due date, there are many places you can slip through. To avoid all this hassle and ensure you pay correct taxes on time, The Tax Lady LLC offers comprehensive tax solutions for all. Contact us now and get started with a smooth and timely tax filing journey with us.