Get ready for tax season

Get ready for tax season

Get ready for tax season.

It would be best if you prepared for tax season as a small business owner or startup. Tax season can be a busy and overwhelming time, but with proper planning and organization, it doesn’t have to be. Here are some tips to help you get ready for tax season. We will discuss what expenses are deductible for a small business owner, tax preparation checklist, tax planning, quarterly tax payments, and corporation taxes.

Gather all your essential documents, including your W-2, 1099 forms, and receipts.

To ensure the best tax experience possible, gathering all the essential documents for filing your taxes is important. Documents include 1099 forms – a form generated for individuals who have received wages from self-employment or any other non-employee income. 1099s provide accurate transaction details and always double-check for accuracy before making a financial move. It would be best to gather receipts for business expenses such as travel and equipment repairs. Collecting these documents can save you time, money, and frustration later when filing your taxes.

Read more What are 1099s? – Startup Tandem

Determine which tax bracket you fall into – this will affect how much you owe or get back.

Making sure you know which marginal tax bracket you fall into is essential when completing your taxes – it can mean the difference between owing money or getting a refund. Depending on your marginal tax rate, you may have taxes withheld from your wages, and high earners could also be subject to an additional form of income tax. Knowing which marginal tax rate applies to you will help you calculate how much tax to expect, so there are no surprises at the end of the year. Thus, determining which marginal tax bracket you fit in is vital for knowing your obligation when filing your taxes.

Read more about How the New TCJA affects Small Business Owners – Startup Tandem

Decide whether to file taxes yourself or hire a professional for tax season.

When tax season rolls around, many individuals and businesses must decide between filing taxes independently or enlisting the help of a tax advisor. It’s important to weigh the monetary value, time commitments, and risks associated with each tax filing method before deciding.

By considering your individual tax needs, you can confidently determine whether it’s more cost-effective and efficient to file taxes on your own or with an experienced tax professional. Whether it’s preparing tax documents, navigating new regulations and tax procedures, or exploring potential deductions and credits to reduce the amount owed – tax advisors offer the deep tax knowledge and expertise necessary for a successful tax season outcome.

Read more 4 Features of Tax Planning that Business Managers Should Know – Startup Tandem

If you’re doing it yourself, choose the right software or online platform to help with calculations.

When it comes to tax calculations, any mistake can be extremely costly. Many taxpayers choose to handle the tax filing process themselves, but it can be daunting if you need the right tools to help. The most important decision is tax software or an online tax platform. Tax software should provide resources to help you accurately and quickly enter your information, figure out your tax liabilities, and file your return easily.

Reimbursement software provides like-minded services but focuses on tracking employee expenses and calculating reimbursements due to employees based on company policy. To get the results you need while minimizing errors and wasted time, choose the right tax software or reimbursement platform for your business’s needs.

Learn About Form 1040, U.S. Individual Income Tax Return | Internal Revenue Service (irs.gov)

Stay organized throughout the process so that you can complete all critical deadlines this tax season.

Staying organized throughout tax season can save you from costly tax-filing mistakes and help you benefit from tax deductions or credits. Compile a tax checklist with tax items such as income documents for the year, tax-deductible contributions, charitable donations, and other applicable tax items. This checklist will make it easier to stay on top of essential tax deadlines without feeling overwhelmed. Knowing the filing deadline – April 15th for the tax year 2020 – is necessary to ensure you submit your taxes on time and avoid penalties or fees for a late submission. Create filing reminders at regular intervals and update them periodically so that you can take advantage of last-minute details when filing your taxes.

Consider standard deductions, such as charitable donations, that can lower your taxable income.

Tax season is often a stressful time of year, but there are several deductions you can take advantage of to help lower your taxable income. For medical expenses, any costs above 7.5% of your adjusted gross income could qualify for deductions, as can certain work-related deductions such as job hunting and transporting materials.

Childcare-related expenses and the earned income deduction can also lower your taxes. If you are a student, you may deduct school expenses such as books, tuition, and other fees. Knowing the many potential deductions will help ensure you’re paying only what you need to come on Tax Day.

Read more The Three Problems of Tax Planning – Startup Tandem

Expenses that are deductible for small businesses for this tax season.

Tax-deductible business expenses can provide invaluable tax savings for small businesses. These tax deductions include legitimate purchases made to support and operate a business, such as materials, supplies, advertising, utilities, travel expenses, insurance premiums, and more. It is essential to keep track of tax-deductible business expenses to maximize tax savings. By understanding which expenses are tax deductible, small businesses can identify potential tax incentives and tax breaks that will help them save money on their taxes each year. As a result of the tax savings generated by deducting classic business expenses such as rent and wages, small businesses can take advantage of better cash flow and profitability.

Tax planning strategies for the year

Tax planning is an effective way to minimize tax liabilities and maximize tax savings. This year, businesses should pay attention to tax credits, tax deductions, and trusts to help optimize their tax savings. Employers must be mindful of the tax laws that affect their employees, such as tax deductions for childcare expenses, individual tax credits for health care costs, and changes in the 401(k) retirement plan limits.

Additionally, business owners may consider registering business-related life insurance plans or setting up a trust fund to manage estate assets. Planning can ensure business owners take advantage of all the tax options this upcoming year.

Corporation taxes

S-corporation taxes are an essential element of the US tax code that must be understood by those setting up a business entity. S-corporations are specialized types of pass-through business entities that differ from traditional corporations in terms of taxation structure.

S-corporations avoid double taxation, where a conventional corporation will face tax on the corporate and individual levels on any profits generated. S-corporations suffer from fewer regulations and other benefits, making them attractive to many entrepreneurial businesses. Therefore, having accurate knowledge about S-corporation taxes is essential for any business looking to maximize its potential profit.

Now that you know some of the basics of filing your taxes, you can start gathering all the necessary documents. Remember which tax bracket you fall into, as this will affect how much money you owe or get back from the government. It’s also important to decide whether you want to file taxes or hire a professional. If you’re going the DIY route, choose the right software or online platform to help with calculations. Stay organized throughout the process and complete all critical deadlines.

Additionally, remember standard deductions that can lower your taxable income – such as donations – and expenses that are deductible for small businesses. Finally, implement tax planning strategies for next year to prepare you in advance. Filing taxes isn’t stressful if you follow these simple tips! Reach out if there’s anything we can help clarify or discuss further.

How Startup Tandem Tax help?

Our team is comprised of experienced and educated professionals that can help you create a plan to help you minimize your tax liability through the year. Contact us here to learn more about how we can help you!

Contact Us – Startup Tandem

 

What are 1099s?

What are 1099s?

1099s Made Easy: A Step-By-Step Guide to Filing Accurately

If you’re like most business owners, the thought of 1099s makes your head spin. This can be a complex and confusing process, but it doesn’t have to be! This step-by-step guide will walk you through everything you need to know to file 1099s accurately and on time. We’ll cover everything from what 1099s are, to the due date, to how to stay compliant with the IRS. By following these simple steps, you can rest assured that your 1099s will be filed correctly and on time.

What are 1099s?

A 1099 is a type of tax form used to report income from sources other than your regular job. This includes income from freelance work, tips, interest, and dividends. For example, if you earned $600 or more from freelancing last year, the company or person who paid you will send you a 1099-MISC form.

If you received a 1099, you must report this income on your tax return. You may also be able to deduct any related expenses, which can lower your overall tax bill.

Keep in mind that if you don’t receive a 1099 form, it doesn’t mean that you don’t have to report the income. You are still required to report all income, even if it is not on a 1099 form.

Download the form here: Form 1099-MISC (Rev. January 2022) (irs.gov)

What is the 1099 filing deadline?

The 1099 filing deadline is the last day businesses can file their 1099 forms with the IRS. This deadline is typically January 31st, but it may be earlier or later, depending on the year. The deadline is usually a few days earlier for businesses that file their taxes electronically.

Businesses use 1099 forms to report income sources other than salaries and wages. This includes income from interest, dividends, rents, royalties, and other sources. The deadline for businesses to file 1099 forms with the IRS is typically mid-February, but it may be earlier or later, depending on the year. The deadline is usually a few days earlier for businesses that file their taxes electronically.

If you are a business owner, it is important to be aware of the 1099 filing deadline to ensure that your forms are filed on time. Filing your 1099 forms late can result in penalties and interest charges from the IRS.

Read about How the New TCJA affect Small Business Owners – Startup Tandem

How do I ensure my 1099s are filed correctly and on time?

The 1099 tax form reports income from sources other than a regular paycheck. This includes income from interest, dividends, capital gains, rentals, and self-employment. If you receive any of these types of revenue during the year, you should receive a 1099 form from the payer by January 31st. You will then need to file this form with your taxes.

Filing a 1099 is more complex than just sending in the form. You will need to ensure that you include all the necessary information and that it is accurate. This means keeping track of your income throughout the year and ensuring you have documentation.

If you need help with correctly filling out a 1099 or where to send it, you can contact the IRS for help. They can provide you with the necessary forms and instructions. Filing your 1099 on time and correctly is essential to avoid any penalties or interest charges.

Read about Auditing 101: Answering Your Burning Questions – Startup Tandem

What happens if I don’t file my 1099s on time?

If you don’t file your 1099s on time, you may be subject to penalties from the IRS. The penalties can be up to $50 per 1099 that is not filed, and you may also have to pay interest on the unpaid taxes. If you don’t file your 1099s, the IRS may also audit you, which could result in additional penalties.

How can I stay compliant with the IRS when it comes to 1099s?

Regarding 1099s, the best way to stay compliant with the IRS is to be as accurate and up to date as possible. Make sure that all of the information on the 1099 is correct, and that you have included all of the required information. If you need clarification, it is always best to consult Startup Tandem’s tax professionals.

1. 1099s are tax forms that report income from sources other than a regular paycheck. This includes income from freelance work, interest, dividends, and rent.

2. The deadline to file 1099s is January 31st.

3. To ensure your 1099s are filed correctly and on time, you should keep good records of your income and expenses throughout the year. You can also use accounting software to help with this. When it comes time to file, ensure you have all the necessary information and check for any errors before sending your forms.

4. If you don’t file your 1099s on time, you may be subject to penalties from the IRS. In extreme cases, these can include fines, interest charges, and even jail time.

5. To stay compliant with the IRS regarding 1099s, keep good records, file on time, and check for errors before sending in your forms.

Read more A Comprehensive Guide to What Accounting Services Include – Startup Tandem

How can Startup Tandem Tax help?

Startup Tandem has tax and accountant professionals in house that can help you prepare 1099s. We have a process in place that has helped us be efficient to meet the deadline with accuracy. Contact us for our 1099s and tax filing services below.

Contact Us – Startup Tandem

What are 1099s?

How the New TCJA affect Small Business Owners

Understanding the New Tax Cuts and Jobs Act: What Small Business Owners Need to Know

The Tax Cuts and Jobs Act (TCJA) was signed into law on December 22, 2017. This new legislation makes sweeping changes to the tax code, which will impact small business owners in several ways. This blog post will outline the fundamental changes that small business owners need to be aware of. We will also provide tips on taking advantage of the new deductions and credits available under the TCJA.

How to choose the best exit strategyHow to choose the best exit strategy

The new Tax Cuts and Jobs Act (TCJA) will impact small business owners in several ways. The most significant changes include the following:

1. The corporate tax rate is reduced from 35% to 21%. This will be a huge benefit for small businesses structured as corporations.

2. A new 20% deduction for qualified business income from pass-through entities such as sole proprietorships, partnerships, and S corporations. This deduction is available for tax years 2018 through 2025 and is subject to various limitations and restrictions.

3. The standard deduction increased from $6,350 to $12,000 for single filers and from $12,700 to $24,000 for married couples filing jointly. This change will simplify tax filing for many small business owners who do not itemize their deductions.

4. The elimination of the personal exemption. This change will offset the increased standard deduction for many taxpayers, especially those with large families.

5. The repeal of the Alternative Minimum Tax (AMT). This provision had been a thorn in the side of many small business owners who were subject to it.

6. New limits on the deductibility of interest expense. Interest expense is now limited to 30% of a company’s adjusted taxable income. This provision applies to new and existing debt and is effective for tax years 2018 through 2025.

7. A doubling of the estate tax exemption from $5 million to $10 million per person. This change will significantly relieve small business owners concerned about estate taxes.

8. The individual mandate’s repeal under the Affordable Care Act (ACA). This change will impact small business owners who provide health insurance to their employees through the ACA exchanges.

One of the most significant changes under the TCJA is the reduction in the corporate tax rate from 35% to 21%. This change will be beneficial for small businesses that are structured as C corporations.

The corporate tax rate in the United States has been lowered from 35% to 21% under the Tax Cuts and Jobs Act (TCJA). This change is beneficial for small businesses that are structured as C corporations. The reduction in the corporate tax rate will allow small businesses to keep more of their profits and reinvest them into their businesses.

Under the old tax code, small businesses were subject to a higher tax rate than larger businesses. This placed small companies at a disadvantage when competing against larger enterprises. The new 21% corporate tax rate levels the playing field and makes it easier for small businesses to compete.

In addition to the reduction in the corporate tax rate, the TCJA also allows small businesses to deduct up to 20% of their qualified business income. This deduction is available to sole proprietorships, S corporations, and partnerships. The deduction is capped at $315,000 for married couples filing joint returns and $157,500 for single filers.

The corporate tax rate reduction and the deduction for qualified business income will help small businesses grow and create jobs. The changes under the TCJA will make it easier for small businesses to invest in their businesses and expand their operations.

Another critical change is the creation of a new deduction for pass-through businesses. Pass-through businesses include sole proprietorships, partnerships, S corporations, and LLCs. Under the new tax law, these businesses can deduct up to 20% of their qualifying business income.

The new tax law has created a deduction for pass-through businesses, which can deduct up to 20% of their qualifying business income. This is a significant change that will benefit many businesses, allowing them to keep more of their income.

Pass-through businesses include sole proprietorships, partnerships, S corporations, and LLCs. This deduction is a significant benefit for these businesses, allowing them to keep more of their income. This is a significant change that will help many businesses grow and prosper.

The standard deduction has also been doubled under the TCJA. For 2018, the standard deduction is $12,000 for individuals and $24,000 for married couples filing jointly. This change will likely result in fewer small business owners itemizing their deductions.

While the Tax Cuts and Jobs Act (TCJA) has increased the standard deduction, it has also resulted in some changes to itemized deductions. For example, the deduction for state and local taxes (SALT) is now capped at $10,000. This may cause some small business owners to reconsider whether to itemize their deductions.

Another change under the TCJA is that the deduction for home mortgage interest is now limited to loans of up to $750,000. This may impact small business owners who have expensive homes or who are considering taking out a loan to purchase a new property.

Overall, the changes to the standard deduction and itemized deductions may cause some small business owners to rethink their tax strategy. It is important to consult with a tax professional to determine which deduction is best for your individual situation.

The new tax law also repeals the individual mandate of the Affordable Care Act (ACA). This repeal may impact small business owners who offer health insurance to their employees through the ACA exchanges.

The individual mandate’s repeal may impact small business owners who offer health insurance to their employees through the ACA exchanges. The individual mandate was a key component of the ACA that required individuals to have health insurance or pay the penalty. The mandate helped to ensure that healthy people would enroll in health insurance plans, which would help to keep premiums low for everyone.

Without the individual mandate in place, fewer healthy people may enroll in health insurance plans offered through the ACA exchanges. This could lead to higher premiums for those who do enroll, which would burden small businesses that offer health insurance to their employees. Additionally, the loss of the individual mandate may cause some insurers to leave the ACA exchanges altogether, which would further reduce competition and drive up prices.

It still needs to be determined exactly how the repeal of the individual mandate will impact small businesses and their employees. However, business owners need to be aware of the potential changes that could occur as a result of this change in law.

The TCJA contains several other provisions that will impact small businesses, including changes to depreciation rules and limits on interest deductions. Overall, the net effect of these changes will vary depending on each individual business’s situation.

The Tax Cuts and Jobs Act (TCJA) made several changes that will impact small businesses. One change is the new depreciation rules. The other change is the limit on interest deductions.

The new depreciation rules allow small businesses to immediately deduct the cost of certain business assets, such as equipment and furniture, up to $1 million. This deduction is available for assets placed in service after September 27, 2017 and before January 1, 2023. The deduction phases out over the next four years, until it is eliminated entirely in 2027.

The change to the interest deduction limit will impact small businesses that have taken out loans or lines of credit to finance their business operations. Under the new law, businesses can only deduct interest on up to $750,000 of debt. This limit applies to both new and existing loans. The old limit was $1 million.

Read more: 5 Types of Tax Planning Everyone Should Be Aware Of – Startup Tandem

Small business owners should consult with their tax advisors to determine how the new tax law will impact them specifically. There are also a number of opportunities for small businesses to take advantage of the new deductions and credits available under the TCJA.

The new tax law, the Tax Cuts and Jobs Act (TCJA), has a number of provisions that will impact small businesses. The most significant change is the reduction in the corporate tax rate from 35 percent to 21 percent. This will provide a significant boost to small businesses that are structured as C corporations.

There are also a number of new deductions and credits available to small businesses under the TCJA. For example, the new law creates a deduction for Qualified Business Income (QBI) from pass-through entities such as sole proprietorships, partnerships, and S corporations. This deduction is available for tax years 2018 through 2025 and can be worth up to 20 percent of QBI.

Another provision of the TCJA that will benefit small businesses is the expansion of the Section 179 deduction. This deduction allows businesses to immediately deduct the cost of certain qualifying property and equipment purchases up to a maximum amount. The maximum deduction has been increased from $500,000 to $1 million under the new law, and more types of property are now eligible for the deduction.

Finally, the new law created a credit for employers that provide paid family and medical leave. The credit equals 12.5 percent of wages paid to employees on leave, up to a maximum of $4,000 per employee. To be eligible for the credit, businesses must have a written policy in place that provides at least two weeks of paid leave per year for full-time employees.

These are just some changes that small businesses need to be aware of under the new tax law. Consult with your tax advisor to determine how the TCJA will impact your specific business. And take advantage of the opportunities available to help your business grow and succeed.

The Tax Cuts and Jobs Act (TCJA) was signed into law on December 22, 2017, and contained several provisions that will impact small businesses. One of the most significant changes under the TCJA is the reduction in the corporate tax rate from 35% to 21%. This change will be beneficial for small businesses that are structured as C corporations.

Another critical change is the creation of a new deduction for pass-through businesses. Pass-through businesses include sole proprietorships, partnerships, S corporations, and LLCs. Under the new tax law, these businesses can deduct up to 20% of their qualifying business income. The deduction is available to companies with income below $157,500 for single filers and $315,000 for married couples filing jointly.

The standard deduction has also been doubled under the TCJA. For 2018, the standard deduction is $12,000 for individuals and $24,000 for married couples filing jointly. This change will likely result in fewer small business owners itemizing their deductions.

The new tax law also repeals the individual mandate of the Affordable Care Act (ACA). This repeal may impact small business owners who offer health insurance to their employees through the ACA exchanges. The Congressional Budget Office estimates that this repeal will result in 13 million fewer Americans having health insurance by 2027.

In addition to these significant changes, the TCJA contains several other provisions that will impact small businesses, such as changes to depreciation rules and limits on interest deductions. Overall, the net effect of these changes will vary depending on each business’s situation. Small business owners should consult with their tax advisors to determine how the new tax law will impact them.

Read more: 4 Features of Tax Planning that Business Managers Should Know – Startup Tandem

How can Startup Tandem help?

Startup Tandem provides startups, individuals and small businesses owners with tax advice, tax planning and tax filing services. Our team can help you and your business get prepared for tax season, create a tax strategy and plan for the year to minimize your tax liability and get your taxes filed. We help C Corps, S Corps, LLC, sole proprietors, and partnerships. We also help individuals with their tax filing needs.

Get ready for tax season now!

 

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