Best options for paying your taxes as a business
One of your best options that you are going to need to consider in order to ensure that you pay your taxes as a business is to make sure that you are filing the right tax forms. The reason that this is so important is that different types of businesses are required to file different tax forms in order to pay their taxes. And if you do not file the correct forms it will basically show that you have not paid your taxes as a business even if you paid them with the forms you originally filed. But something else that you are going to need to consider as an option for paying your business taxes is when you are going to pay those taxes, most companies prefer to pay their business taxes more than once a year, but a lot of that depends on what type of business you are.
Here are some tips to keep in mind to make sure that you choose the right tax forms for your business.
To file your federal income taxes you will need to fill out a Form 1040 along with a Schedule C or Schedule CZ, this form is due on April 15th following the end of the tax year. You will also need to file a Schedule SE to file your self-employment tax; this form should be filed with your Form 1040. If you are paying estimated tax you will need to file a Form 1040-ES and this form is due on the 15th day of the 4th, 6th, and 9th month of the tax year, as well as the 15th of the first month following the tax year.
Partnerships do not pay income taxes as a business, but they must file an annual information return to report income, deductions, gains, losses, profits, etc from its operations, instead the profits or losses are passed divided among the partners and they must report their share of the profit or loss in their individual income tax returns. To file an Annual Return of Income you must file a Form 1065 by the 15th day of the 4th month at the end the fiscal year. Each partner must be provided with a copy of Form 1065 so that they can file their own individual income taxes.
When paying taxes for a corporation the profit of the corporation is taxed to the corporation, but when the shareholders of the corporation are paid dividends they must pay an income tax on the dividends. Corporations have to file a Form 1120, 1120-A or an 1120S depending on if they are a corporation or an S-Corporation. These are due on the 15th of the 3rd month following the date the corporation's tax year ended. So if a corporation's tax year ends in December they would have to pay their taxes in March, but if they use a fiscal year it would not be due until three months after the fiscal year ends.
One of your best options for paying your taxes as a business to is to make sure that you are organized for tax time. The reason that this is one of your best options is that if you are organized prior to filing your taxes you will not be overwhelmed so that you can file your taxes in a timely manner.
Here are some tips you can follow to ensure that your business is organized for tax time long before taxes are due.
Create the files that you need. Although this sounds really simple and it actually is many people do not do it because they overlook it or they put everything into one huge file. This is great if you only have a few items, such as pay stubs, but when you are organizing your tax records for a business you need to have multiple files to store all of your paperwork. If you itemize your deductions you should have a separate file for each deduction. You should also have a separate file for your business expenses, such as utilities, payroll, etc. Keep it all in one spot that is easy to access, such as in a filing cabinet or in accordion files.
Sort your receipts. By keeping your receipts sorted you will find it is easier to find the correct supporting documentation you need if there are questions on your taxes. Besides this is why you created individual files in the first place so that each group is in its own folder making it easier to sort and easier to find what you need.
If you want to use your computer or any other electronics you have as a business expense you will need to keep a log of all activity. The IRS requires stricter reporting when it comes to using computers, video cameras, etc for business expenses because so many of them are also used for pleasure. To do this you should keep a notebook of some sort right next to your computer to record the day and time spent using the computer for business purposes, you should do this everyday. Then make sure that you file the records with your tax papers at the end of each work week or as the paper fills up.