Filing taxes with the IRS is something we all have to do. Before moving forward with this process, however, it’s important to ask yourself some simple questions to ensure you enjoy a stress-free tax-filing experience. Corporate Tax Network recommends that you consider the following questions:
1) What is your tax-filing status?
Your filing status should be easy to determine, unless you’ve had a recent life-changing event. If you are single with no children, you should file your taxes individually. If you are married, you can file either jointly or separately. Another option is the head-of-household status, which can apply to single parents or married couples with one or more dependents. On the other hand, a divorce or the birth of a child could change your status, so make sure you know what it is prior to filing your returns.
2) Which tax return forms must you file with the IRS?
From a W-2 to a 1099, there are dozens of tax returns. Each form is used for a specific purpose. If you are an employee or work for yourself, there are different forms to use. There are also forms for claiming various tax deductions and credits. Make sure you file the correct tax forms that fit your financial situation.
3) What are your tax-filing deadlines?
Most taxpayers circle April 15th on their calendars as the most important deadline for filing taxes. However, other deadlines exist, which are based on your employment status and other factors. If you run a small business or are self-employed, you’ll likely face quarterly tax filing requirements, which are paid throughout the year. Keep this information in mind so that you don’t miss a filing deadline.
4) If you own a business, how is it taxed?
Business entities run the gamut in terms of taxation. C corporations, S corporations, LLCs, sole proprietorships, and partnerships are the basic business structures. Corporations and LLCs face similar tax obligations, while sole props and partnerships are essentially considered the same tax-wise. You can determine your exact filing requirements and forms by knowing the specific entity you own.
5) What deductions and tax credits can you claim?
Consider all possible deductions you can claim to save you money. The home office deduction, vehicle deduction, and deductions for charitable contributions are just a few of the many write-offs you can enjoy. Plus, you don’t have to be a business owner to claim deductions. If you have a child, you can claim them as a dependent and receive a tax credit. Other credits can help reduce your tax bill. Do some research to discover all of your tax deduction and credit opportunities. The last thing you want to do is miss out on keeping more money in your pocket.
6) Should you use a professional accounting service to handle your tax-filing needs?
Taxes can be complicated to understand. This level of sophistication increases even more for small business owners. If you aren’t comfortable handling your taxes on your own, it is highly recommended that you seek professional assistance from an accountant. This holds true for handling your personal and business finances as well. Accountants are skilled at putting your money in the right places to help you keep more of what you earn.
Jason Sager, CPA is a tax manager at Corporate Tax Network. Sager specializes in working with small business clients in various industries, including technology and emerging companies, real estate, consultants, and distribution. He also has extensive experience in the areas of financial planning and wealth management. Corporate Tax Network is a national full-service accounting firm that specializes in assisting startups and small businesses with tax planning and preparation, bookkeeping, and payroll. Learn more at www.corporatetaxnetwork.com* or follow @CorptaxNetwork.
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