If you own a small business, it is likely that you will have to file a tax return. While it may seem like a daunting task, there are things you can do to prepare for your accountant’s visit. One of the most important things you can do is to gather information about your business that will help him or her prepare the best possible tax return.
The amount of money you have to spend to prepare your small business taxes will vary depending on your type of business. There are a number of tax deductions you can take. Some of them include ordinary commercial insurance premiums, which can be deducted if you have employees. However, you should also pay attention to the tax rules that apply to your specific business type.
As you prepare your tax return, you should have a good idea of how much you made last year. You should also have records of purchases and sales. Your accountant should be able to tell you what the appropriate deductions are. For example, if you had to buy equipment, you might want to ask your accountant if you can claim the cost of the equipment.
If you have an employee, your accountant will probably ask you to provide him or her with a W-2. You may also need to provide your social security number. This number is essential to your IRS identification.
An accountant will also need to have an accurate picture of your business’s liabilities. To do this, they may ask you to provide copies of your payroll records. They may also require you to supply them with a list of investments. A list of all your stocks and bonds is also a good idea.
Depending on your particular type of business, you may be required to pay estimated taxes quarterly. If so, make sure you have plenty of cash on hand to meet your payments. Also, be sure to get your loan balances in order.
One of the most useful items to bring to your accountant’s office is a copy of your annual balance sheet. This document will show your assets and liabilities. It will also tell you how much equity you have in your business. Using a software package, you can easily generate a balance sheet. Remember to keep a copy of it and a duplicate.
Besides this, you might also need to provide your accountant with a 1099-MISC. These are forms that are used to report income for corporations and other businesses. Getting a copy of the form can be a good way to demonstrate to your accountant that you are a legitimate business.
Another thing to consider when preparing your tax return is whether or not you are going to be e-filing your return. E-filing allows you to submit your form online and have a quick confirmation. On the other hand, you can submit your tax return by mail.
Whether you choose to use a computer software package or an in-house bookkeeper to prepare your small business tax return, you will need to provide your accountant with the right information. Taking a few minutes to gather the right information will ensure that you can get your tax return done quickly and accurately.
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