As a small business owner, you wear many hats and have many unique responsibilities but you cannot neglect the importance of having an experienced tax professional guide you through the process of gathering and storing your information so that it can be filed come tax time.

Many avoidable tax mistakes that could lead to tax controversies or audits can be captured by a tax professional well in advance. It’s imperative to understand how to avoid these challenges when filing small business taxes for the first time. Clarity on your structure and filing deadlines can go a long way towards answering some of the most common questions.

Understanding Business Tax Returns

Filing small business taxes for the first time is very much like filing your personal income taxes. You’re reporting the money that your business made or lost during the year. Tax returns for businesses and individuals are required every year and you’ll end up paying interest and penalties if you miss a tax filing date. You can use the IRS’s small business tax calendar to stay on top of these deadlines.

Whether your business is an S corporation, C corporation, partnership, LLC or sole proprietorship, you’ll want to understand the pros and cons of each type of arrangement when it comes to taxes. As your business grows you may need to evolve the formation structure of your business. Your business structure will also determine your tax filing deadline. Business tax returns are due by April 15th for LLCs whereas corporations need to file them by March 15th.

It’s essential to have the right tax planning strategies when filing your small business taxes for the first time. Making changes later can be costly, inconvenient and is unnecessary. Working with an accountant and a tax strategist can help you determine whether or not your current tactics are aligned with the environment and your tax liability.

Look for a GA tax strategy lawyer who is well versed in small business taxes and can help you avoid common pitfalls that could turn into tax controversies in the future. At a basic level you’ll need a balance sheet, profit and loss statement, and cash flow statement.

Common Forms Used When Filing Your Small Business Taxes for the First Time

Different forms will apply to your situation based on your status as a business. The common forms to file taxes as a business owner could include:

  • For corporations, Form 1120.
  • For S corporations, Form 1120-S.
  • Multi-member LLC and partnerships, Form 1065 for the partnership or LLC and each partner must file a schedule k1.
  • Single member LLCs and sole proprietors file a schedule c for business profit or loss.

In most cases, you’ll already have a small business accounting system established to keep track of expenses and sales. This can make it much easier to forward this information to your accountant or to get a snapshot so you can sit down with your Atlanta tax strategy lawyer to avoid problems. Make sure that you have company wage statements already available.

Employees should receive a W2, any employees who received more than $600 in a calendar year is a contractor and need to file Form 1099-MISC. If you realize in filing your taxes for the first time as a small business owner that you have a substantial tax liability or that you have not been properly prepared in the past with the right strategies, you’ll want to share this information with a knowledgeable attorney who can help you prepare for these tax circumstances and adapt for the future.

Schedule a consultation today with a Georgia small business tax strategy lawyer if you have more questions about your current strategy or need help discussing tactics for 2021.