2019 - 2020 Tax Filing Tips
With the new year upon us, it's a good time to adopt a
more effective philosophy for your small business. Fact is
many small business owners find their daily tasks eating up
all their spear time due to poor tax record keeping
If this is the case with you, it's time to adopt a new standard for keeping your tax documents organized, so that you can make the tax filing season flow smoothly, and reduce your stress and tax liability all at the same time. Here are some suggestions to help you get organized and keep you small business documentation organized for tax season.
Tax Document Organization
As the new year rings in it's time to safely store away you old tax records and start a system to organize the new ones that are being created to handle the current years transactions. This is a great time to think about the fact that a well organized system will save you lot of time and frustration when your ready to dig into the next tax seasons tasks. Storing documents and receipts in an organized fashion so that they are easy to locate when required for your income tax preparation it imperative to reducing stress.
Start with setting up a system to organize the following documentation:
- Make sure that all you business accounts are reconciled and the books are always kept up to date for tax preparation purposes. Print outs of financial statements should be included for quick reference. Include a print outs of balance sheets as well as profit and loss statements. Keep a full printed copy of your general ledger for the entire year. This should list the contents of each expense category for taking deductions on your tax return.
- Your appointment book with a list of meetings and other business events listed therein will support company expenses and vehicle use. Keep a record of your beginning and ending odometer readings for yearly calculations on depreciation and total business mileage deductions.
- Assets and Policies: Keep all your small business asset documents together (loan agreements, insurance policies, equipment, real estate, etc.) These files should remain within easy access.
Calculating Your Estimated Tax Payments
The TurboTax Business Edition is a great tool in your arsenal if your business is a sole proprietorship, S Corporation, or partnership. TurboTax Small Business Tax Software will offer many tools to help you stay on top of your yearly tasks including helping you estimate your required quarterly tax payment installments.
Quarterly tax payments must be postmarked by the day they are due to be considered paid on time. Additionally based on self employment income you may be required to pay additional Medicare tax payments as well.
If are a C corporation, be sure to determine the due dates of your estimated tax payments ahead of time and get them in on time to avoid penalties.
Organizing Your Small Business Payroll
If you perform all your own payroll services in house,
there’s plenty of extra work needed to keep your business on
track. Along with normal quarterly tax filings, you are
required to submit a
Form 940 (FUTA tax) along with W2 Forms by January 31st
as well as any state required documents. Review your
W2 forms carefully and reconcile the total of W2 wages
with your general ledger to make sure all calculations add
up correctly. Be sure numbers match for each employee prior
to mailing the W2's. Confirm all social security numbers and
mailing addresses for each of your employees.
All 1099 forms are also required to be mailed by Jan. 31st to those who provided over $600 in services or rental income. Software programs such as QuickBooks, will simplify the process by generating completed forms for you. This software allows you to run a 1099 report to determine which payees you need to supply forms to. Be sure that a Social Security number or federal ID number is listed on the 1099 form for each payee and that those numbers match each name.