PAYSTUBMALKR.COM present the article: A short tax filing guide for New business persons
Taxation is different in dates for filing and other obligations for the different legal structures of businesses. We will review first the different type of legal structures of business organizations or companies and partnerships.
paystumakr.com team hopes that you will make good business, make a lot of money and pay the taxes according to the law, here is our help for our reader and clients in filing the tax return. Do not forget to make the paystubs of your employees and deduct their taxes.
Marinus van Reymerswale – The Tax Collector
Sole proprietors of business must file schedule C reporting Gain and lost from your company. You should use the form 1040 ( Individual Income tax return) reporting your business result as profit and loss. As a sole proprietor, you also need to file schedule Self-Employment Tax (SE) with your form 1040. As a calendar-year taxpayer, your date for filing is April 15. A fiscal-year taxpayer should file is returns no later than 15 days after the fourth month after the tax-year ended.
Estimated tax payments must be made if you think that may owe at least $1,000 in Federal tax after deducting your withholding and credits, and will be less than the smaller of:
1. 90% of the current year tax return
2. 100% of the liability of your last year.
Reymerswaele Two tax collectors
Partnerships and limited liability companies (LLCs).
LLC structure has to file with the form 1065. (U.S. Return of Partnership Income) reporting income and loss to the Internal Revenue Service (IRS).
Copies of schedule K-1 for the Form 1065 must be furnished by the partnership. The due filing date is the same as for the sole proprietors.
Regular corporations have to file the income tax return using the Form 1120.
The due date for calendar-year taxpayers is two months and 15 days after the end of your tax year.
S corporation owners should file using the form number 1120S. Like partnerships members, the shareholders need to have a copy of Schedule K-1 that is part of the 1120S. Its due date is equal to the regular corporations.
The Tax Collector and His Wife by Marinus van Reymerswale
Deductible Business Expenses
“ordinary and necessary.” is the IRS definition of deductible operation costs for your business. “Ordinary” means expenses they are accepted for a business like the one that you are filing. If your business sales books, ordinary expenses can be, electricity bill, rental pay or employee but not Luxury home furniture, for example.
The money changers by Marinus van Reymerswale
Marinus van Reymerswale
Those are the expenses can be deducted because they are that are appropriate and constructive expenses, for example:
New equipment under the IRS Code Section 179 you can fully deduct from your taxable income only limited amount from the cost of new equipment per year instead of using the depreciation of the investment in equipment in a few years. You can update yourself reading the IRS Section 179 at a Glance for 2018
Business expenses, between the options for business expenses that are accepted as a deduction you can find, advertising, employee benefit programs, insurance, legal or other professional services, telephone, rent, office supply, salaries and professional memberships and publications.
Auto expenses are allowed by the IRS when you use your car for your business activities. Car expenses can be claimed as mileage rate; it means that you have to calculate the total miles by the rate per miles that you logged during the year adding parking and tolls you paid at the same time. A larger deduction could be accepted by the IRS if you chose to use the actual cost option. Being qualified to use both ways the IRS permits you to chose the one that gives you a better result. Do not forget that you need all the records of those expenses. Update yourself by reading About Publication 334, Tax Guide for Small Business and this Publication 463 (2017), Travel, Entertainment, Gift, and Car Expenses
Meal and entertainment expenses are deductible only when it is associated with the business, modest ordinary and necessary. Only 50% of the expenses on meals and entertainment is deductible. The IRS will look for the proof that your expenses were made for gaining more business, sales or investments in your business, the justification for the expenses on business entertainment must be real and solid, not good intentions, it must be clear that you made business and had some entertainment and not entertainment and only some talking on business. When you prepare this kind of events, make sure that you are going to conduct business during it. An old saying “business before pleasure” is a good way to guide you, first make a substantial discussion about business and later some modest dinner or other social activity. Do not neglect the bureaucratic action of collecting all the documentary accompanying the expenses of business entertainment. Especially when it is more than $75, all expenses must be recorded on your books with the reason for it, amounts, dates, location, type and your list of invited persons with titles and occupation.
Travel expenses, some business needs you to take trips and travel out of your hometown, it takes transportation, hotels, and meals. This expenses must have a detailed record of all the money you spent on your trips, the dates of departure and return of each trip, the total days you spent in business and the locations you visited. The reason and goals for the trips should be clear business issues. Expenses like cleaning, laundry, while traveling and communications are deductible.
Taxpaying is as important as money making, getting hot with the IRS can make you losing money or even losing your business. Take care of bookkeeping and tax consultation at the time, it will avoid you head hake and be losing time and energy that you better invest in the business and make more money by producing and not getting troubles with taxation authorities.