Business Tax Preparation: See How You Can Make It Much Simpler

Have you started work as a freelancer but haven't filed your taxes by yourself before? Learn how an accountant can help handle your finances.

About Me
The Importance of Using An Accountant

When I started working from home as a freelance contractor, I knew that I was going to need to figure out how to file my taxes. I started paying close attention to my expenditures, and I decided to work with a professional to do my taxes. I was really happy that I had decided to work with a professional after filing for the first time. My accountant helped me to write off some of my expenses, and it was great to see how much I was able to save. This blog is all about the importance of using a professional accountant, and how it can help you.


Business Tax Preparation: See How You Can Make It Much Simpler

29 December 2021
, Blog

Many people want to run their own businesses because it comes with numerous benefits. To begin with, you have total control over work schedules, and you can hire anyone you want to hire. However, it's also good to appreciate that running your own company or business also comes with some less enjoyable responsibilities like paying taxes. Tax preparation is critical, but it's not a fun activity for many business owners. However, it shouldn't be a big issue for you because a tax accountant can help you prepare for the tax season. Here are three crucial business tax preparation tips to help you as a business owner.

Handle Personal and Business Expenses Separately

Many business people, especially those running small businesses, don't have extensive paperwork to handle. For this reason, many of them aren't able to separate life and work. However, this shouldn't be so, especially when dealing with business taxes, because they can get you into problems when not handled at the right time. You should handle personal and business expenses separately to make accounting much easier. The IRS may, in some instances, disallow some business expenses based on certain aspects. So it's advisable to operate two separate bank accounts, one for personal expenses and another for business expenses, to make tax preparation easier for you.

Keep the Dates in Mind

As a business owner, you need to know the tax season dates so you can prepare in good time. If you don't keep the tax dates in mind, you will always work against the tax calendar, affecting your business functions in various ways. The IRS usually provides a tax calendar for the self-employed and businesses. The calendar helps you know when to file your W9 and W2 forms and estimate the amount of tax you should submit. Filing your returns late will definitely attract hefty penalties, and you should avoid it by keeping the tax dates in mind.

Outline Your Business Deductions

You need to list the likely deductible expenses as you prepare for the tax season. Of course, your business deductions will vary based on certain aspects like whether you own or rent commercial property, number of employees, and business category. If you run a small business, some of the possible business deductions include office supplies, employee salaries, business equipment and machinery, corporate donations, travel expenses, insurance premiums, and retirement contributions. You may also have other deductions like parking and mileage expenses, internet and phone expenses, maintenance and repair expenses, and waste, water, and power expenses. By itemizing all your business deductions, you simplify the tax preparation process.

Contact a local accountant to get more business tax preparation tips.