Even though tax season comes along every year, managing it all is still difficult. The process of filing business taxes can be intimidating for small business owners. Learning the process might be overwhelming because of the large amount of numbered paperwork, challenging accounting software, and confusing terminology. Additionally, in order to avoid late fees, you must comply with strict deadlines set by the federal government. To say the least, tax season is stressful. With the help of this blog, you can know about important tax forms, terms, and dates for small businesses.
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Small Business Tax Forms
A number of forms are available from the IRS to help small businesses with tax preparation and deductions. Understanding which ones you require will
What it is: Annual Federal Unemployment Tax Act (FUTA) tax is reported on Form 940.
Employees who are fired for reasons beyond their control are entitled to unemployment insurance. Your contribution to this program as an employer is calculated using Form 940. Form 940 must be submitted just once a year, however, FUTA taxes must be paid on a quarterly basis.
Due Date: February 1, 2023
Form 941/ Schedule B
What it is: Schedule B, also known as Form 941, details the amount of payroll and federal income taxes withheld from employee paychecks. Form 941 must be submitted every three months. Only businesses with employees are required to submit this form.
- First Quarter: April 30, 2023
- Second Quarter: July 30, 2023
- Third Quarter: October 30, 2023
- Fourth Quarter: January 30, 2024
What it is: Your independent contractors should receive Form 1099, which details the sums you paid them for their services throughout the tax year.
Due Date: February 1, 2023
What it is: Each of your employees should receive a Form W-2, which details their annual salaries and the amount of taxes deducted from their paychecks. You must provide W-2 forms to your staff by January 31 and provide copies of them to the IRS as a small business owner. Customers of QuickBooks for Windows or QuickBooks for Mac can purchase printed W2 kits to distribute to their employees.
Due Date: February 1, 2023
What it is: Form W-4, which is completed by your employees, indicates how much tax you, as the employer, should deduct from their pay. On Form W-4, your employees are allowed to list allowances for partners or dependents. If an employee has more than one job or if their spouse has a job that pays income, they may ask you to deduct more taxes from their pay.
Due Date: February 15, 2023
Form 1040/ Schedule C
What it is: Form 1040, often known as Schedule C, details the revenue and expenses of your company for a specific tax year. If your company is a sole proprietorship, you must submit Form 1040 annually.
Think of it this way: Form 1099 details the earnings of each of your independent contractors, but Form W-2 details the earnings of each of your employees. You can also disclose how much money your business made by using the Schedule C form.
Due Date: April 15, 2023
What it is: Business income or loss is reported on Form 1065, often known as the U.S. Return of Partnership Income. You must submit Form 1065 each year to report your business’s income, losses, deductions, and credits if it is a partnership or limited liability corporation (LLC).
Due Date: March 15, 2023
What it is: Corporation income or losses are reported on Form 1120, often known as the U.S. Corporation Income Tax Return. You must submit Form 1120 each year if your business is classified as a regular corporation.
Due Date: The Corporation’s tax year ends on the fifteenth day of the fourth month following that.
What it is: The Social Security and Medicare tax (SE tax) that self-employed people must pay is determined by Schedule SE. You must submit Schedule SE if you are self-employed.
Due Date: April 15, 2023
What it is: Rent and utility costs are examples of qualifying living expenditures that can be written off as business expenses using Form 8829, also known as Expenses for Business Use of Your Home.
Form 8829 might be useful for business owners who conduct part or all of their operations from home by letting them know which costs is tax deductible. The IRS is extremely clear about what expenses can be written off and what counts as a workplace. This means that it’s critical to conduct the study or speak with a tax expert before claiming deductions.
Due Date: April 15, 2023
What it is: Form SS-4 is used by new businesses to request an employer identification number (EIN). Employers, Sole Proprietors, Corporations, and Partnerships all receive an EIN from the government, which is a nine-digit number used for tax filing and reporting. It serves as a special identifying number for your business, and the Form SS-4 is how you get your hands on one.
To Get Familiar with Small Business Tax Terms
Do your taxes make you feel like you need to learn a completely different language? We can help by defining a few of the common tax terms you might come across.
When you work as an employee, taxes are deducted from each check. You are in charge of calculating and paying your business taxes as a business taxpayer. Estimated tax is what it is termed because it might be challenging to forecast revenue with absolute certainty. In the Guide to Understanding Quarterly Taxes, you may learn more about estimated tax, including how to determine how much to pay.
In reality, the term payroll tax refers to two amounts: the tax withheld from an employee’s pay and the taxes that the employer owes the government in relation to those wages. A percentage of the total employee salaries is typically used to calculate payroll tax. This tax is used by the government to cover expenses like income tax, Medicare, and Social Security.
Your taxable income is reduced by a tax deduction, which also reduces the amount of tax you must pay. If you run a small business, you may frequently write off expenses for your home office or vehicle expenses if you use them for business travel.
Your taxable income is also reduced by an exemption. A deduction, on the other hand, refers to an amount that is the consequence of spending; an exemption, on the other hand, refers to a specified amount presented by the government. A popular exception is the one for children or a spouse who is dependent.
Depreciation is the term used to describe the decline in the value of a thing over time. Consider purchasing an all-in-one printer three years ago. Due to its age, Normal wear, and the possibility that it is now obsolete, It is currently worth less than what was paid for it when it was new. Your company is able to deduct the loss of that value through depreciation.
Dollar for dollar, tax credits directly lower the amount of tax that must be paid. One of the best ways for small business owners to reduce their tax bill is through tax credits.
A business can be set up in a number of ways, such as a sole proprietorship, C corporation, S corporation, or Limited Liability Company (LLC). The ideal option for your business should be selected because each structure has a variety of benefits. Unsure of what to pick? Guide to Business Structures outlines the variations between various forms and helps you in selecting the one that is best for you.
When you request an extension, the IRS will offer you an extra six months to finish and submit your business taxes for a specific year. However, You must file an extension application (Form 7004) before your initial tax due date in order to be granted an extension.
Audits take place when the IRS wants to verify your records and make sure your tax return was filed accurately. Audits are nothing to be concerned about when your records are in order and you have all the necessary supporting documentation. If there are errors, the auditor will advise a reassessment.
Accrual and Cash Methods
There are two different kinds of accounting methods: Accrual Accounting and Cash Accounting. The more popular way of recording income and expenses is accrual accounting. Only after the money is collected or paid are these amounts entered into the cash method. When you invoice a client, you record income using the accrual approach. Only when the customer has really paid do you record it using the cash method.
Important Tax Dates for Your Calendar
Nowadays, there are a number of events that small company owners need to keep in mind; it’s not just your mother’s birthday that you need to mark on the calendar. The following 2023 tax dates are important for small business taxpayers to be aware of:
- The deadline to submit the fourth-quarter projected tax payment for the 2022 tax year is January 15, 2023.
- The deadline to submit independent contractor wage statements and forms is January 31, 2023.
- W-2 Forms must be mailed out to employees by February 1, 2023, and businesses must send Form 1099 to contractors by that date as well.
- The deadline for paper-filing Form 1099-MISC documents without claimed amounts in Box 7 is February 28, 2023.
- Businesses must mail Forms 1099 and 1096 by March 1, 2023.
- The deadline for electronically submitting Forms 1097, 1098, 1099, Forms 3921, 3922, and Form W-2G is March 31, 2023.
- April 15, 2023 is the due date for first-quarter estimated tax payments for the 2023 tax year as well as the deadline for filing business reports for sole proprietorships and single-member LLCs.
- Second-quarter estimated tax payments for the 2023 tax year are due on June 15, 2023.
- Third-quarter projected tax payments for the 2023 tax year are due on September 15, 2023.
You don’t have to face tax season alone; it might be challenging. Managing your finances and submitting your small business taxes may be simple using QuickBooks Live. Find a bookkeeper online that can help you in figuring out the deductions you might be eligible for. Getting online professional guidance can help you save time and get peace of mind. With the above blog, you can solve your issues regarding important tax forms, terms, and dates for small businesses. In case you still face any query related to this issue then you can call the help desk any time as the help desk team is always there for their users.
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Frequently Asked Questions (Faqs)
What is the most Important Tax Forms?
Form W-2. Your employer completes it to record your wages for the fiscal year. The salary you received and the taxes your employer withheld are some of the most important details you will need while filling out your 1040 and are provided to you on this tax forms.
What is the Due Date for Company Tax Returns?
The ITR filing’s last date FY is 2021-22 (AY 2022-23), the Income tax return due date is 31 July and it is the last date to file ITR.
What are the Three most Common Types of Business Taxes?
The most common types of business taxes are:
● Self-Employment Tax.
● Income Tax.
● Excise Tax.
● Employment Taxes.