Filing taxes is mandatory for all businesses. However, it can sometimes be daunting for emerging businesses since it is not a one-size-fits-all solution. You may have to deal with different tax categories and returns. You will also encounter various tax forms you must fill out when filing your taxes. This guide provides a small business tax preparation checklist to help you save time and become tax-compliant.

Gather Relevant Documentation

Filing tax returns can be hectic if you lack the documentation and information relevant to your business. Gathering all the relevant documents can streamline the process, helping you save time and resources. This small business tax checklist highlights the most essential information for filing taxes.

  • Business legal name
  • Employer’s Identification Number (EIN)
  • Social Security Number
  • Tax Identification Number
  • Income, returns, and allowances
  • Expenses
  • Deductions

Understand the Various Tax Forms

Different businesses have varying forms for filing tax information. Whether filing taxes electronically or manually, understanding the various tax forms can help you pick the appropriate one and enjoy considerable tax savings. Here’s a breakdown of the different tax forms for small businesses.

  • Sole proprietorships, partnerships, and limited companies (LLCs): Form 1040
  • Sole proprietorships and LLCs with one member: Form 1040-SC
  • Partnerships and LLCs with multiple members: Form 1065
  • Corporations: Form 1120
  • S Corporations: Form 1120-S
  • Nonprofit organizations and HOAs: Form 1120 or Form 1120

Report Payments To Independent Contractors

Filing information returns for third-party contractors and non-employees is a critical step in the small business tax prep checklist. Depending on your business, you may sometimes enlist freelancers, vendors, and independent contractors for various products or services. Payments to contractors exceeding $600 within a tax year are taxable and must be reported by issuing Form 1099 to non-employees.

Understand Other Tax Obligations

Your business structure determines what other tax returns you must submit to the state or federal tax authorities. This tax checklist for small businesses lists other tax obligations you must meet for compliance.

  • Employment taxes
  • Self-employment taxes
  • Excise taxes
  • Sales taxes
  • Property taxes

Seek Professional Help

Submitting tax returns can be hectic, taking a toll on your business operations. Enlisting a professional accountant can help minimize the burden, allowing you to focus more on your business.

Abel Accountants can assist you in your small business tax preparation. Our firm will review your financial records for accuracy, select the appropriate tax forms, calculate your tax returns, file taxes on your behalf, and respond to audit notices from tax authorities. Call us today to schedule a free assessment of your tax obligations.