Preparing Your Business Taxes

Posted by Daniel Lawrence on July, 2016

Taxes are a major part of running your business that each business owner must handle on a yearly basis. If you are running a small business, the taxes you file are going to be less complex than if you are running a large-scale corporation. If you have never filed taxes as a business owner before, you might want to seek a specialist in business tax preparation in Morris County so that you can ensure that your taxes are filed according to laws in New Jersey. Here are some of the steps that are required.

Employer Identification Number

Your first step in filing your business taxes is to obtain an employer identification number from the IRS. Most companies may require you to have an EIN before anyone else can do business with you. Many small businesses do not need an EIN because they are sole proprietors and do not have any employees. It is always wise to apply for one simply as a precaution. You can do this through the IRS website.

Keeping Records

You will want to make sure that you keep very accurate records of all expenses and sales throughout the entire year. It is essential that you keep all sales receipts, cancelled checks, deposit slips, invoices, and any other financially-related documents. This helps to prove your company’s expenses and income as well as any deductions that you may qualify for. Try to keep all of your tax-related documents in a secure area such a fire-proof box or other safe place. You should keep these items for about five years.

Accounting and Bookkeeping

It is important that you maintain an in-house accounting or bookkeeping system to keep track of your records. If you do not have experience in accounting, you may want to hire a professional accountant to help through the process. If you have a small business, the software you use does not have to be very complex. However, a professional will be able to help you better maintain your finances and organize all of your documents for you via their own accounting or bookkeeping system.

Employees

If you have any employees in your small business, you will want to make sure that every employee fills out a W4 tax form so that you can determine the amount of taxes that will be withheld from their checks. This will help to make it much easier for you when it is time to file business taxes.

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