Taxes may not be due until April, but for many small business owners, getting them done early delivers some real perks. In most circumstances – baring a government shutdown, that is – submitting your taxes early can get you a faster return, but that’s not all. Starting your taxes now can give you more time to pay, if you owe. Similarly, it can also give you some much-needed buffer time in the case that you find you’re missing paperwork, receipts, etc. necessary to complete your taxes.
If you’re itching to get your taxes started early, here are a few tools and resources that can help you get things started on the right foot.
Tools to Get Your Business Taxes Rolling Early
Tax Prep Checklists
Even your best efforts and high-end tools will fall short if you don’t have the right information. If you’re attempting to get your taxes done early, the first thing you should do is audit the information you have and identify any gaps you need to fill or paperwork you need to obtain.
Not sure exactly what that means? Worried you’re overlooking valuable information, like potential deductions? Your best bet it to leverage a solid tax prep checklist. If you’re currently using an accounting tool, like QuickBooks or Freshbooks, you may be able to consult build-in tax documentation and download valid reports.
However, there is a plethora of free, easy-to-access checklists out there, including lists found on the resources that follow, but H&R Block, the long-time tax resource, has compiled a pretty comprehensive yet simple tax-prep checklist that includes everything from income concerns, like sales records, gross receipts from sales or services, to expenses, which is a fairly lengthy list of items including obvious factors, like internet, travel, as well as easily overlooked ones, like depreciation and interest expenses.
With so many tax resources online, it can be difficult to hone in on the most efficient ones, but the right resources can help you get your taxes done quickly and accurately.
IRS’s Small Business & Self-Employed Tax Center
Perhaps the best way to get the business tax information you need is to go directly to the source. The IRS website includes tools and resources for a variety of tax circumstances, and that includes those designed to help small business owners and individuals who are self-employed.
The online center includes information that is pertinent to your year-round tax obligations as well as those specific to the looming tax deadline. Among these tools, small business owners may find the following to be particularly helping them as they navigate the tax terrain:
IRS Video Portal: Perfect for those who prefer video and audio help, the portal offers clips that answer common questions. It also includes archived webinars and live panel discussions that can prove valuable in your efforts to get those taxes in early
IRS Virtual Workshop: Like the video portal, the workshop offers presentations that can help small business owners navigate the complexities of tax requirements. This includes information on basic concepts, like “How to file and pay your taxes electronically,” as well as more specific concerns like “what you need to know when you run your business out of your home.”
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Small Business Administration (SBA) Small Business and Self-Employed Tax Center
The SBA has been a long-time ally to small business owners, and that effort continues to ring true during tax seasons. The tax center offers tools and resources designed to help business owners file important forms, like Form 1040 (Schedule C, E, and F) and Form 2016.
Additionally, the site includes valuable preparation guidance on business tax credits, expense deductions, and self-employed or independent contractor concerns.
DIY Software & Apps
If you’re looking for a tool that will offer step-by-step guidance, then you may want to consider utilizing one of the paid services offered by some of the nation’s top tax preparation companies.
DIY software and apps can provide basic to advanced support, depending on the program you purchase, while helping you maximize deductions, avoid penalties, and increase accuracy — and it certainly faster than going the manual route.
There are numerous options available on today’s market, but the following tax software options typically top the charts:
Intuit TurboTax: At $169.99, TurboTax is one of the more expensive filing options, but loyal customers feel the features are worth it. Users can import information from QuickBooks, access personal guidance and support throughout the process, and gain peace of mind through accuracy, deduction, and tax credit checks.
H&R Block: We mentioned H&R’s checklist early on, but the company deserves a follow-up mention here. H&R Block offers simple-to-use tax filing services that are perfect for those who are filing as pass-through entities, like sole proprietorships, LLCs, and S Corporations. Freelancers can secure this service for $69.99, while self-employed and small business owners can expect to pay at $104.99 for federal returns, though both services are currently being offered at promote rates that can save you about $20, on average.
Out of all three options, TaxAct is considered the most affordable option — rates typically run $59.99 to $69.95 – an attractive perk for business owners on a tight budget. As part of this, users can leverage basic functionality, like importing returns from the prior year.
That said, the program is minimalist and not as “pretty” as some of the other services. There is also a decrease in support when compared to other software options. However, if you’re comfortable making your way with minimal guidance, then TaxAct is as reliable as any other service.
Getting your small business taxes started early is a smart move. In some cases, you can access your return faster, but even if that’s not the case, starting early can help you identify any missing information; it can also help you make payment arrangements should you find you owe more than expected.
Ready to start your taxes early? The right checklist and resources can help you navigate the process with ease, while some smart software can make pulling it all together a breeze.
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This article was originally written on January 8, 2019 and updated on January 27, 2021.
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