Completing and filing a small business tax return is different than completing and filing a personal tax return. The main difference is the number of forms that must be completed and the availability of different write offs and deductions. While business tax returns are not overly complicated, ensure that you use the proper form and research any questions you have. The Internal Revenue Service (IRS) website is relatively easy to navigate and provides answers to most questions. Here are three tips to filing a return:
1. Only Deduct What You Can Prove
Hopefully, you've got some sort of receipt for your businesses expenses. Any expense for which you can provide a receipt if requested you can comfortably deduct, but if you lack a receipt, think twice about whether the deduction is worthwhile. Small costs unsupported by a receipt can turn into a huge headache if the IRS decides to audit your return. Take a walk around your office to identify possible deductions. Miles driven on your personal vehicle, computer equipment and other expenses are legally deductible.
2. Don't Forget Start-up Costs
The IRS allows all new businesses to deduct up to $5,000 in start-up costs. These costs can include attorney or accountant fees, training materials, employee training and other business expenses. Any personal training or education you undertook for business purposes is also deductible.
3. Complete All Required Forms
Unlike a personal tax return, a business return consists of several different forms. One form lists profit and losses, while another calculates the self-employment taxes. Determine which forms you must complete through the IRS website. Completing each one and submitting them together makes it less likely that you'll be audited.