☐ Know your deadlines
Depending on your business structure, your tax due dates will vary. If your business runs or is taxed as a sole proprietorship, single-member LLC or C-Corporation, the tax deadline for filing your 2023 tax return is April 15, 2024. The IRS has also provided an extension for tax filers in certain areas impacted by natural disasters and severe weather.
If you have a business that runs or is taxed as an S-Corporation or Partnership, the usual deadline for tax filings is March 15th.
☐ Gather needed documents
Before filling out any tax form to report your business income, gather all your records that report your business earnings and expenses. It might be a good idea to ask your tax professional what additional documents are necessary, but in the meantime, you can start by collecting your documentation that shows the following:
- Tax forms sent or received, such as W-2, 1098, or 1099 forms.
- Income.
- Gross receipts from sales or services.
- Sales records, including returns and allowances.
- Business checking and savings account interest.
- Inventory.
- All expenses, including insurance, loan interest, office supplies, and professional fees.
- Wages, bonuses, and commissions paid.
- Rent for your business.
It can also be helpful to locate a copy of your completed tax return from the previous year. These can often be helpful for tax professionals to see when preparing more complex returns. It can help ensure you have not forgotten to mention or provide information about a credit or deduction you previously made. It can also lead to more money in your pocket. If your tax professional spots a claim or deduction you did not make in the previous year that you likely qualified for based on your current taxes, they can help you amend a prior year’s taxes to get that money back.
☐ Select the correct tax form
Selecting the right form or forms for your business can be confusing. The forms you might need for your small business vary based on the structure of your business.
Sole Proprietor
Partnership
C-Corporation
S-Corporation
LLC
Depending on elections made by the LLC and the number of members, the IRS will treat an LLC as either a C-Corporation, S-Corporation, partnership, or as part of the LLC's owner's tax return.
- If the LLC is classified as a partnership you will use a 1065, U.S. Return of Partnership Income.
- If the LLC is classified as part of the business owner's own tax return you will use a 1040, U.S. Individual Income Tax Return and Schedule C (Form 1040), Profit or Loss from Business.
- If the LLC is classified as an S-Corporation you will use a 1120-S, U.S. S-Corporation Income Tax Return.
- And if the LLC is classified as a C-Corporation you will use a 1120, U.S. Corporation Income Tax Return.
Talk to your tax professional, if you have questions about which form to file. If you need tax help, Rocket Lawyer can now match you with a tax pro for fast and affordable tax filing services.
☐ Filing an extension
If you are not sure you will be able to file your business taxes before the deadline, you may consider filing an extension. An extension typically extends the due date by 6 months. So if your due date is on March 15th, you will have until September 15th to file your taxes. Most businesses will use Form 7004 to apply for an extension. However, if your business activities are being reported on your personal tax return, you will want to use Form 4868.
It is important to know that an extension does not extend the period for any payment that is due, but does help you avoid penalties and fees for filing your return after the deadline. You are still required to pay any taxes owed by the original due date to avoid any late fees.
Tax prep can be confusing for anyone, especially if you own a small business. If you have questions, need your taxes filed quickly and accurately, or are still not sure how to go about filing your taxes Rocket Lawyer can help.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.
