How to File Business Taxes OnlinePublished:
Just like individuals paying the federal and state income tax, business owners can file taxes online. TurboTax, the most popular online tax software, offers two tiers of business filing: Home & Business (for sole proprietors, consultants, contractors and single-owner LLCs) and Business, for corporations, partnerships and LLCs with multiple members.
The IRS requires many corporations to file quarterly. This involves estimating what your taxes will be for the year. Sole proprietors will use Tax Form 1040-ES for this, which TurboTax should direct you to. If your corporation is not large enough to have a payroll department, an accountant and a bookkeeper, you will need to file taxes online yourself and keep accurate records, so that you will be able to consult them during the filing process.
Before you file taxes online, make sure you have access to a balance sheet that states your profits and losses. Credit card statements and bank statements can help fill any gaps in your records. Obviously, the IRS is primarily interested in your taxable gains. However, taking advantage of tax credits and tax deductions when you file taxes online may be key to steering your business through the tax season.
Software to file taxes online with, such as TurboTax, will advise you of the most common deductions. These include depreciable assets, which are used in your business and will deteriorate over a period of time. The vehicle you use for business, your work computer, and any machine you use for your business are all depreciable, though land is not. If you purchased or disposed of assets this year, you should know those dates. Keep track of mileage on your work vehicle as well, so that you can deduct it when you file taxes online.
Other important information to know when you file taxes online includes your tax ID number, your business code number, and the date your business was incorporated. There should be accompanying articles of incorporation that have this date, as well as the number of shareholders and how large each of their ownership stakes is. A partnership agreement will also be helpful to have, as this should tell you how much capital each partner invested into the company. You should be able to produce a payroll report as well, if you have employees.
And don’t forget last year’s business tax return, when you sit down to file taxes online again this year. If there is any inconsistency in figures, you should catch it before the IRS does.