Starting the Startup: Preparing Your Small Business for Tax Season
Preparing your small business for its first tax season can be a real challenge. As a new small business owner, you wear many hats—and one of them is oftentimes an accountant. Trying to find the time to complete your yearly taxes between day-to-day operations isn’t easy and can take a lot of preparation, especially if it’s your first time doing so. Here are 5 tips to assist you in being better prepared for your first April 15th deadline.
Separate your personal bank account from your businesses bank accounts
Whether you’re running from a dedicated office space or just a home office, having a separate business account is important for many reasons, but especially important for tax purposes. Keeping a separate business bank account with allyour business-related financial transactions provides a clear trail of business revenue and expenses. This makes it easier to run your business, submit your taxes, and provide a clear path in the event of an audit.
Take a look at Radius Bank’s small business Tailored Checking account. Benefits include 0.75% APY on balances of >$10,000, unlimited transactions, mobile check deposit, free ATM usage worldwide and the ability to bank anywhere with their online and mobile banking platforms.
Familiarize yourself with the forms you’ll need
You can’t file your taxes correctly without the right form, so identifying the proper tax documents you’ll need is one of the first steps that any small business owner should take.
The type of form you require will depend on the nature of the enterprise you run. For example:
- Sole Proprietor: Attach a Schedule C form to your personal income tax return, oruse a 1099-MISC
: Use a 1120form
- S Corporation: Use a 1120S form
- Partnership: Report expenses, income and losses on a Form 1065