Filing Tax Returns for Individuals and Businesses

Steps for businesses to file tax returns:

  • Put together all the relevant information. Get all your documents together: last year’s business return, partnership agreements, all accounting records, bank and credit card statements, payroll, any assets purchased, any vehicle data
  • Get your last year’s return. It will contain important information that can help you with filing this year’s return. There is a host of information available in the past returns that you need such as the date your business started, business code and activities, early balance sheet data, shareholder info, cash vs. accrual
  • Compare this year’s return with last year’s return to find out any missing information/deductions, or any big changes in numbers that may have been much smaller or larger in the previous or next year.
  • Articles of incorporation: If you are filing taxes for a newly established company, you’ll need a list of your shareholders and any ownership %ages, the location the business was incorporated in, officer names.
  • Partnership agreement: This is an important document if you don’t have a previous year’s tax return. It’ll contain a lot of information that you need such as when the partnership was established, the list of all partners, how much each partner has contributed in the initial investment and the current ownership &ages, any incomes and expenses that are not included in the profit, loss, and ownership %ages, and how your business keeps a track of their cash and accrual finances.
  • Accounting records: The main aspects of your tax return contain income and expense records. You’ll require balance sheet information as well. Print out any profit and loss statements and balance sheets that you have recorded in any accounting software. Or you can put this information together in Excel. It’ll be easier to put together your taxes if all your accounting information is properly recorded and neatly organized.
  • Bank statements: These documents are what will show you all your income and expenses for the year, and are even more important if you haven’t organized your accounting data properly. So, make sure you have kept these records somewhere easily reachable so you can access them at any time. Properly reviewing all your expenditures and deposits will help you classify and sort out income and deductions for your tax return.  Resolve any cash balances to the checking account on your final bank statement of the year so you have taken into consideration all transactions in your accounting report.
  • Credit card statements: Often times, small business owners don’t have time to keep an eye on their daily expenses such as for meals, equipment, supplies, parking, and other expenditures. But when it comes tax time, knowing how much you’ve spent is really important to calculate write-offs. Keep all credit card statements with you, especially the year end summary statement which will show you a breakdown of all expenses by category, which is readily provided by credit card issuers.
  • Payroll reports: All your payroll tax filings will help you make sure you have the right payroll and payroll tax expenditures in your accounting report.
  • List of all asset purchases: All chief assets should be depreciated over time, instead of being expensed in the current year. Keep the following information available with you for these assets: description of the asset, date it was put into service, how long it was used for (%), price of the asset including sales tax.
  • Depreciation schedules: If you are doing your own tax return for the first time, you will need to know details of the businesses’ assets, and that it is depreciating as of the beginning of the tax year. You will need following information: description of the asset, price of the asset, when it was put into service, accumulated depreciation up to this tax year, percentage of business usage, and the asset’s recovery period.
  • Details of asset dispositions: In order to calculate any gain or loss on sales for your tax reports, such as if your business sold off any depreciable assets in the year, you will need the price of the asset, date it was sold, description of the asset, expenses of the sale, and any other past depreciation.
  • Vehicle information: If your business owns and vehicles that are used by your employees or shareholders either for business or personal use, you will require mileage data in the form of: miles driven, personal miles, commuting miles .

Written by
admin
Leave a Reply

Learn More

© Copyrights 2020 | optymoney