Do the words “tax season” make you shudder? You’re not alone. Over half of US adults say tax season stresses them out. And when you run your own business, your tax time heebie-jeebies are bound to be even more severe.
Tax season is faster and easier when your bookkeeping is organized. And our partners at Bench will handle all of your small business bookkeeping, and even file your taxes for you.
But if you’re filing your own taxes, read on. We’ll cover all of the forms you will need to file and any tax deadlines you will need to meet—plus how to file on time or get an extension.
The documents you need to file taxes
When you file your tax return, you must be able to prove what you earned and what you spent —for the sake of reporting income, as well as claiming tax deductions. These records are not submitted with your return, but you’ll use them to calculate your total income and expenses for the year. However, you will need to have them on hand in the unlikely event you’re audited.
Basic info for filing small business taxes
Personal and business info: Your address, the address of your business, your full name, and your Social Security Number (SSN).
Last year’s filing: Having your previous return on hand makes it easier to complete this year’s return and keep track of info like depreciable expenses.
A Tax ID number: There are a variety of different numbers you may use as a tax ID number—from your SSN to your Employer Identification Number (EIN). Not sure which method to use for your business? This article on tax ID numbers offers a handy rundown.
See also: Small Business Tax Strategies
Records of small business revenue
Invoices you sent to clients: Keeping copies of any communications and paid invoices helps you track your revenue, and can support your case if your revenue or income are ever questioned by the IRS.
Records of goods sold: Cash receipts, or transaction lists from an online store or point of sale, can serve as a record of revenue you’ve earned.
Other sales records tracking revenue: It’s smart to hold on to any records of revenue you’ve received throughout the year. In lieu of organized bookkeeping and regular income statements, you can use them to calculate your revenue for the year.
Records of expenses
By subtracting your expenses from your revenue, you get your total income for the year. That’s essential for filing. Also, many expenses are deductible—and if you make deduction claims, you’ll need to back them up.
Be sure to hold on to:
Office supplies receipts
Other deductible expense receipts
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Annual financial statements
An income statement, balance sheet, and (if you use accrual accounting) cash flow statement for the year will make filing a return easy. Comprehensive financial statements give you all the info you need to file. If you haven’t made financial statements part of your business strategy, now may be the time to hire a bookkeeper.
See also: What Is Annual Revenue?
Essential tax forms and deadlines
Once you have your documents in order, obtain the forms you’ll need to file your return. The exact forms you’ll use, and the deadlines for filing, depend on your business structure.
Tax forms and deadlines for sole proprietors
Filing Deadline: April 15, 2024 (the same as your personal taxes)
There’s no need to file a separate return for your business. Report your business income and expenses on Schedule C of your personal tax return. If you’re itemizing deductions, list them on Schedule A.
The IRS instructions will walk you through the process of tallying your expenses and revenue for the year, and determining your income.
Tax forms and deadlines for LLCs
Filing Deadline: April 15, 2024 (single member)
Filing Deadline: March 15, 2024 (multi member)
If you’re a single member LLC, you’ll file your taxes the same way you would as a sole proprietor.
If you’re a multi-member LLC, you will elect to file taxes as either a partnership or an S corporation.
Tax forms and deadlines for partnerships
Partnership filings, and Form 1065, can get pretty complex. For this reason, we recommend working with a tax professional to file your taxes.
Tax forms and deadlines for C corporations
Filing Deadline: April 15, 2024
In addition to your personal tax return, you’ll file a separate return for your corporation using Form 1120. This form is similar to Schedule C of your personal tax return, but more complex—and separate from your personal finances. Most business owners hire an accountant to help with Form 1120.
Tax forms and deadlines for S corporations
Filing Deadline: March 15, 2024
You’ll file a Form 1120S for your corporation, and each shareholder will need to report their profits and losses with Schedule K-1. Similarly to a C corporation return, most S corps get help from an accountant to file taxes
Tax forms and deadlines for businesses that hire contractors
Filing Deadline: Sent to recipients by January 31, 2024
If you’ve paid $600 or more to a contractor, you need to file Form 1099. One copy of this form goes to the IRS, for the sake of filing your own taxes; another copy goes to the contractor, so they can use it to file their taxes. If you’ve hired more than one contractor you will need to file a separate Form 1099 for each contractor.
How to file taxes online
Gone are the days of filing paper returns. The most efficient (and popular) way to file taxes with the IRS is online.
IRS Free File
The IRS has partnered with 8 providers who offer free versions of their accounting software that you can use to file your taxes online. You’re automatically enrolled in Free File once you sign up with one of these providers— there’s no need to sign up through the IRS website.
Most providers offer a basic software package for free. These typically aren’t able to cover all the needs of a business—such as filing itemized deductions. You’ll need a paid version for that; the packages recommended for sole proprietors range from $25 (1040.com) to $85 (H&R Block).
IRS Free File Fillable Forms
Essentially, Free File Fillable Forms lets you complete IRS forms online, through the IRS website. These forms will do basic calculations for you, but they don’t check for errors.
Fillable Forms will automatically calculate your tax refund, and you can elect to have your return transferred directly to your bank account. You can also resolve any taxes due online.
If your business is small and relatively simple—like a sole proprietor—and you’re already experienced with filing taxes for your business, Fillable Forms may be a good choice.
Otherwise, the process may intimidate you, and you run the risk of making errors. In that case, you may be better off having someone file your taxes for you.
If you’re short on time and energy this tax season, and don’t want to wade through the depths of filing by yourself, consider BenchTax. With BenchTax, a team of professional bookkeepers will review and proof your books up to the current month; Next, they’ll work with tax experts to get your taxes filed accurately and on time while taking advantage of as many itemized deductions as possible.
Learn how to pay less to the IRS with this webinar from Bench. Sign-up to Bench using this link, and get 50% off your first 6 months!
How to get an extension
If it looks like you’ll be late filing taxes, file for an extension ASAP. An extension will save you from IRS late filing penalties, and requesting an extension is pretty straightforward.
Filing a tax extension for your sole proprietorship or single-member LLC
If you plan to pay your taxes online, you can get a six-month extension through the IRS payment portal.
Otherwise, you can request an extension by filing IRS Form 4868.
Filing a tax extension for your multi-member LLC, partnership, or corporation
You can file for a six-month extension using IRS Form 7004.
File early, rest easy
If you can, file your taxes early—meaning, well before the deadline. This may take some prep, but it has advantages.
First, you’ll get your tax refund earlier. Remember, a tax refund is your money—you just happened to overpay it to the IRS, and they’re holding on to it. Your money isn’t collecting interest while the IRS holds it. The sooner you get it back, the sooner you can put it to work for your business.
Second, you’ll have the info you need to start planning your estimated taxes for the coming year—you can check one more item off your tax to-do list.
To file early, you’ll need tip top books. The more organized your books, the easier it is to get the numbers you need to file your return. The best way to stay organized is to do your bookkeeping throughout the year, rather than handling it all in one mad scramble come January.
If you think you’ve submitted your taxes twice, don’t worry. We got the perfect article for you: Filing Duplicate Tax Returns? Here’s What to Know and Do
Ready to get your books in order? Check out Bench. They’ll do one month of bookkeeping for you, free.
Tax time doesn’t have to be stressful. And it won’t be, so long as you have everything you need to approach it in an organized way. Your filing date, and the forms you need, vary according to your business structure—so make sure you know what’s needed before the deadline comes.
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