<p>Establishing your small business as a <a class="link" href="https://1800accountant.com/blog/business-entity-llc">Limited Liability Company, or LLC</a>, offers many benefits, from increased credibility to personal asset protection. LLCs provide owners or members limited personal liability if the company experiences legal trouble. Members can include corporations, foreign entities, individuals, and other LLCs, with membership ranging from a single owner to unlimited owners. When you're established as an LLC, it provides your company flexibility with its profit/loss allocation and tax status.  </p>



<p>However, the process of how to register an LLC is different in each state and is often intimidating and complicated. 1-800Accountant offers<a class="link" href="https://1800accountant.com/services/entity-formation"> expert services</a>, with deep knowledge of the nuanced state and other regulations, to help you establish your small business LLC, so consult with a professional today to see how we can help you. Continue reading our expert guide as we walk you through the steps to register an LLC. </p>



<h2>6 Steps to Register an LLC </h2>



<h3><strong>1. Develop Your Articles of Organization</strong></h3>



<p>You'll need to develop your company's Articles of Organization and submit them to your Secretary of State. Among the essential details, you'll include in this document is your company's name. You want to select something that hasn't already been registered and is unique from a branding perspective. Your Articles of Organization also include your company's address, members' names, and your Registered Agent (see below).</p>



<p>Specifically, your company's address can be necessary for taxes and other regulations. Often these <a class="link" href="https://www.sba.gov/business-guide/launch-your-business/register-your-business" target="_blank" rel="noreferrer noopener">four elements</a> can determine the state in which you must register and file taxes for your LLC:</p>



<ul>
<li>The company has a physical presence in the state</li>



<li>In-person meetings with clients are conducted in the state</li>



<li>A significant amount of your revenue comes from the state</li>



<li>Your company’s employees work in the state</li>
</ul>



<h3><strong>2. Draft Your Operating Agreement</strong></h3>



<p>Your <a class="link" href="https://1800accountant.com/blog/operating-agreement">Operating Agreement</a> outlines how the LLC will be run and each member's rights and responsibilities. Think of this as the business plan you and your fellow members (if applicable) will follow when operating the business. Once each member signs the agreement, it becomes a <a class="link" href="https://www.law.cornell.edu/wex/operating_agreement" target="_blank" rel="noreferrer noopener">legally binding set of regulations</a> that members must follow. There are six critical components to what your Operating Agreement should include:</p>



<ol>
<li>Member Ownership Percentage</li>



<li>Voting Responsibilities and Voting Rights</li>



<li>Powers and Duties of Managers and Members</li>



<li>Profit and Losses Distribution</li>



<li>Meeting Rules</li>



<li>Buyout and Buy-Sell Rules</li>
</ol>



<h3><strong>3. Complete the Paperwork for Licenses and Permits</strong></h3>



<p>Again, there is much variation and nuance from state to state, but you'll want to complete your state's required license and permit paperwork. Check with your local&nbsp; Secretary of State's office, a Business Bureau, or a Business Agency for more about rules and regulations specific to establishing an LLC in your state. Remember that you may also need to register your LLC with your local city or county government.&nbsp;</p>



<h3><strong>4. Publish a Newspaper Notice</strong></h3>



<p>Though not required in all states, some states require you to publish a notice in your local newspaper announcing your intention to establish your LLC. Note that this notice is different from any newspaper marketing or advertising you might choose to do. If your state requires it, you'll need to publish your notice before filing your Articles of Organization.</p>



<h3><strong>5. Hire a Registered Agent&nbsp;</strong></h3>



<p>You’ll want to consult with a <a class="link" href="https://1800accountant.com/blog/small-business-need-registered-agent">Registered Agent</a>, one of the many services offered by 1-800Accountant, who will serve as an official point of contact with the state to receive service of process, legal and state documents, and transmit these communications to your business. All states require your LLC or corporation to have a Registered Agent.&nbsp;</p>



<h3><strong>6. Tax Registrations</strong></h3>



<p>Once you've determined where your LLC will be established, you'll need to file the required tax paperwork for that state. Some states require you to file Initial Reports or Tax Board registration within 30 to 90 days after you register in your state. Generally, members of an LLC will have the option to choose between pass-through taxation (similar to partnerships) or corporate taxation.</p>



<p>A domestic LLC with at least two members is considered a partnership for federal income taxation unless members file a Form 8832 and elect to be treated as a corporation. An LLC with a single member is regarded as an entity separate from its owner for income taxation unless the member files Form 8832 and elects to be treated as a corporation. Regarding employment tax and certain excise taxes, a single-member LLC is classified as a separate entity. </p>



<h2>LLC Formation FAQs</h2>



<h3>What are the benefits/disadvantages of registering an LLC?</h3>



<p>Benefits include choosing between a member-managed or manager-managed company, limited liability for members, fewer paperwork requirements (compared to other business structures), and flexibility with profit/loss allocation and tax status. One disadvantage is that in some states if a member leaves an LLC, you'll need to dissolve that LLC (with the option to launch a new LLC with remaining/new members) and pay a termination fee. Another disadvantage is that members must pay a self-employment tax if they file taxes as a general partnership. </p>



<h3>How much does it cost to register an LLC?</h3>



<p>The cost to register your LLC will vary by state, but you should expect to pay <a class="link" href="https://www.sba.gov/business-guide/launch-your-business/register-your-business" target="_blank" rel="noreferrer noopener">at least $300</a> to get your LLC up and running.&nbsp;</p>



<h3>What are Articles of Organization for an LLC?</h3>



<p>Your Articles of Organization lay out the basics as you and other members (if applicable) begin establishing your LLC. This document will include your company name, address, member names, and the registered agent and will be filed with your local Secretary of State's office.&nbsp;</p>



<h3>What documents are needed to form an LLC?</h3>



<p>This is a tricky question and doesn't have a simple one-size-fits-all answer since there is so much nuance from state to state. Your best bet is to educate yourself about the rules and regulations specific to your state (and potentially your city and county government) or hire a professional to help you with the process.&nbsp;</p>



<h3>How 1-800Accountant Can Help You Start Your LLC&nbsp;</h3>



<p>Running a business is hard enough so let us eliminate the hassle of establishing your LLC. We can even help with your taxes while we're at it. Schedule your free consultation with one of our <a class="link" href="https://1800accountant.com/services/entity-formation">entity formation experts</a> today.</p>

Establishing your small business as a Limited Liability Company, or LLC, offers many benefits, from increased credibility to personal asset protection. LLCs provide owners or members limited personal liability if the company experiences legal trouble. Members can include corporations, foreign entities, individuals, and other LLCs, with membership ranging from a single owner to unlimited owners. [&hellip;]

Young business woman standing near her work desk while holding a cup of coffee and thinking about the steps to register an LLC.

6-steps-to-register-llc

6 Simple Steps on how to Register an LLC

<h2>What is Form 1120?</h2><p><a class="link" href="https://www.irs.gov/pub/irs-pdf/f1120.pdf" target="_blank" rel="noreferrer noopener">Form 1120</a>&nbsp;is an IRS form that <a class="link" href="https://1800accountant.com/blog/what-is-a-c-corporation" target="_self">C corporations</a> use to report their income, gains, losses, deductions, and credits, as well as calculate their income tax liability. Since C corporations are separate entities from their owner or owners, taxes are paid at the <a class="link" href="https://1800accountant.com/blog/corporate-tax-rates">corporate income tax rate</a> instead of the personal tax rate. Depending on how much revenue your corporation generated for the year, this rate could be anywhere between 15% to 35%.</p><p>Continue reading as we'll discuss how to fill out each page of Form 1120, when it's due, and how we can help with the process.</p><h2>How to Fill Out Form 1120</h2><p>Here's a helpful guide on what you'll need to fill out on each page of Form 1120:</p><h3>Page 1</h3><ul><li>Basic information about your corporation. This includes name, address, Employer Identification Number, date of incorporation, and total assets.</li><li>Gross income consists of gross receipts, costs of goods sold, dividends, interest, rents, royalties, capital gains, and other sources of income. You add all of this up to get your gross income.</li><li>Tax-deductible expenses. Lines 12 to 26 show all available deductions, including officers' compensation, salaries, wages, repairs and maintenance, charitable contributions, advertising, etc. On-Line 26, you can account for other expenses such as meals and entertainment, utilities, insurance premiums, etc. Check the Form&nbsp;<a class="link" href="https://www.irs.gov/pub/irs-pdf/i1120.pdf" target="_blank" rel="noreferrer noopener">1120 instructions</a>&nbsp;for more details about deductions.</li><li>Tax, refundable credits, and payments. This is the last section of page 1, where you calculate whether you receive a refund or owe money to the IRS. Refer to Schedule J on Form 1120 to get the information you need.</li></ul><h3>Page 2</h3><ul><li><strong>Schedule A</strong> – Cost of Goods Sold: If your corporation is service-oriented, then this section is not applicable to you. Otherwise, if your business is taking the deduction for the cost of goods sold on page 1, you must account for these amounts in this section.</li><li><strong>Schedule C</strong> – Dividends and Special Deductions</li></ul><h3>Page 3 &amp; 4</h3><ul><li><strong>Schedule J</strong> – Tax Computation and Payment</li><li><strong>Schedule K</strong> – Other Information: This includes your company’s accounting method, business type, NAICS classification number, ownership of stock, and information about your shareholders.</li></ul><h3>Page 5</h3><ul><li><strong>Schedule L</strong> – Balance Sheet per Books: You do not have to complete this section if your corporation’s total income and year-end assets are under $250,000.</li><li><strong>Schedule M-1</strong> – Reconciliation of Income (Loss) per Books with Income per Return.</li><li><strong>Schedule M-2</strong> – Analysis of Unappropriated Retained Earnings per Books.</li></ul><p>If keeping track of all this information seems overwhelming, it’s best to utilize professional bookkeeping and tax preparation services like&nbsp;<a class="link" href="https://1800accountant.com/" target="_blank" rel="noreferrer noopener">ours</a>&nbsp;to ensure your form is completed thoroughly and accurately.</p><h2>When is Form 1120 Due?</h2><p>When you operate a C-Corporation, you are given the option to choose when to start and end your tax year, but usually, it’s at the beginning and end of a quarter. For the 2022 federal tax year, Form 1120 is due on the 15th day of the fourth month after the end of your corporation’s tax year. For example, if your corporation’s tax year ends on December 31, 2022, you must file and pay your corporate income taxes by April 18, 2023. The due date must always occur on a business day.</p><h2>Work With Experts Who Know Corporate Taxes</h2><p>IRS Form 1120 is an essential document for C corporations to report income, losses, deductions, and credits while determining their tax liabilities. The process to complete this form can be a bit tricky, with there being various schedules and aspects to consider. This form is crucial in fulfilling your corporate tax obligations accurately, we recommend seeking professional help. At 1800Accountant, our <a class="link" href="https://1800accountant.com/services/small-business-taxes">business tax experts</a> stand ready to guide you through the process, ensuring your Form 1120 is filed correctly and submitted on time. This gives you time back to focus more on your business's growth and less on tax complexities.</p>

What is Form 1120? Form 1120 is an IRS form that C corporations use to report their income, gains, losses, deductions, and credits, as well as calculate their income tax liability. Since C corporations are separate entities from their owner or owners, taxes are paid at the corporate income tax rate instead of the personal tax [&hellip;]

A desktop with a calculator, a clock, a potted plant, and a note saying "tax time" on a pink background.

form-1120

Tax Form 1120: What It Is and How to File It

What Is Tax Form 1120 and How to File It

<p>Reporting taxable income to the Internal Revenue Service (IRS) isn't always a straightforward process. There are over 800 tax forms, from individual documents to information returns, which can create confusion and questions. This includes the common question: what is the difference between 1040 and 1099 tax forms?</p><p>IRS Form 1040 and 1099 are pivotal for tax purposes and income reporting. Form 1040, or U.S. Individual Income Tax Return, is the main tax form used to report annual income and claim deductions, credits, and other adjustments. On the other hand, Form 1099 is a series of forms used to report various income received throughout the tax year, such as interest, dividends, self-employment income, and more. This great blog will help you understand the difference between 1040 vs 1099 forms, along with detailed tips to help you fill out each.&nbsp;</p><h2>What Is a 1040 form?&nbsp;</h2><p>Form 1040 is the most common IRS form taxpayers use to file their annual tax returns. It includes reporting income and calculating federal income tax liability. Both employees and independent contractors are expected to complete and submit a 1040 tax form annually by the tax reporting deadline.&nbsp;</p><p>You’ll need to include income from employee (W-2) jobs and freelance (1099) jobs on this form. It tells you two things: what you owe and how much you’ll get back.</p><p>Each section of Form 1040 <a class="link" href="https://www.irs.gov/pub/irs-pdf/f1040s1.pdf" target="_blank" rel="noreferrer noopener">serves a specific purpose</a>:</p><ul><li><strong>Contact information </strong>– Taxpayers provide their personal information and state whether they’re single, married, and, if so, filing jointly or separately.&nbsp;</li></ul><ul><li><strong>Reporting additional income</strong> – This section lists the taxpayer’s income, including wages, salaries, and other forms of earned income, as well as unearned income from sources like investments. You’re also expected to include refunds, credits, or offsets.&nbsp;</li></ul><ul><li><strong>Calculating the adjusted gross income (AGI)</strong> – This section determines your AGI. This is the total income you received during the tax year, minus deductions and exemptions, such as small business expenses, health savings account (HSA) deductions, or IRA contributions.&nbsp;</li></ul><ul><li><strong>Calculating tax liability</strong> – After calculating your AGI, you can apply the correct tax rate to this figure, accounting for any other deductions, such as the <a class="link" href="https://www.irs.gov/credits-deductions/individuals/child-tax-credit" target="_blank" rel="noreferrer noopener">child tax credit</a>, which could reduce your tax liability.</li></ul><ul><li><strong>Report taxes owed or refunds due</strong> – If you owe taxes, the final section is the palace where you pay. If you are owed money back, you can select whether you want that deposited directly into your bank account or as a check.&nbsp;</li></ul><h2>Tips on How to Fill out a 1040 Form</h2><p>Use these great tips to help you avoid costly mistakes when filling out your Form 1040.&nbsp;&nbsp;</p><h3>#1 Gather All of the Relevant Documentation</h3><p>To properly fill out your 1040 form, you’ll need access to all relevant documents for reporting earned income, expenses, and deductions, such as your W-2, 1099 forms, donations, receipts, and so on.&nbsp;</p><p>Organizing and maintaining a comprehensive paper trail will not only make filing taxes easier but also helps you defend yourself in the event of a tax audit.&nbsp;</p><h3>#2 Understand Your Filing Status</h3><p>As the <a class="link" href="https://www.irs.gov/help/ita/what-is-my-filing-status" target="_blank" rel="noreferrer noopener">IRS notes</a>, “Your filing status is used to determine your filing requirements, standard deduction, eligibility for certain credits, and your correct tax.”</p><p>This will play a key role in your estimated tax rate and deduction and exemption eligibility. When it comes to selecting filing status, you typically have one of five options:&nbsp;</p><ul><li>Single</li><li>Married filing jointly</li><li>Married filing separately</li><li>Head of household</li><li>Qualifying widow(er)&nbsp;</li></ul><h3>#3 Claim All Deductions and Credits&nbsp;</h3><p>You should be aware of all of the deductions and credits you are eligible to claim.&nbsp;</p><p>These will depend on your specific circumstances, but they could include items like children's tax credits, charitable contributions, or work-related expenses. By claiming as many deductions and credits as you’re legally entitled to, you can lower your tax liability.&nbsp;</p><p>The 1040 form is brief, so you’ll need to attach additional forms if you have other types of income, tax credits, or tax deductions.</p><h3>#4 Double-Check Your Calculations&nbsp;</h3><p>Before you submit your 1040, be sure to double-check your calculations so that no errors are present. It can be helpful to refer to this guide on <a class="link" href="https://1800accountant.com/blog/how-to-fill-out-form-1040">how to complete form 1040</a> accurately.</p><p>You could face increased tax liability or penalties if mistakes are missed. By carefully reviewing your work, you can file your taxes confidently.&nbsp;</p><h3>#5 File Your Taxes on Time</h3><p>In normal circumstances, the tax filing deadline arrives on April 15th. If you’re unable to file your federal income tax return by this date, you can request an extension, though you’ll still be expected to pay an estimate on any taxes owed. How do you ensure it arrives on time?&nbsp;</p><ul><li><strong>If you file by mail </strong>– The envelope must be properly addressed, have the correct postage, be postmarked, and be deposited in the mail by the due date.&nbsp;</li></ul><ul><li><strong>If you file electronically</strong> – You must electronically submit the documents before the due date. This information will be contained within the electronic files and metadata. The IRS will usually send an email or text message verifying that they have received and accepted your return.&nbsp;</li></ul><div class="embedded-entry redactor-component block-entry" type="entry" data-sys-entry-uid="blt7626d80de5e39a0c" data-sys-entry-locale="en-us" data-sys-content-type-uid="rte_ad" sys-style-type="block"></div><h2>What Is the 1099 Form?&nbsp;</h2><p>Practically every taxpayer will be expected to <a class="link" href="https://1800accountant.com/blog/how-to-fill-out-form-1040">complete a Form 1040</a>, so long as they earn above a certain income threshold. However, if a person earns non-employee income, they may also be expected to fill out a 1099. The income reported on the 1099 form will eventually be added to a line on the 1040 form.&nbsp;</p><p>For example, if you’re self-employed or run a small business, you may be required to use a 1099 form to report your income. Contracted work, such as consulting or freelance, also falls under this tax bracket, which has become a major category thanks to the rise of the gig economy.&nbsp;</p><p>Today, independent contractors who earn at least $600 in annual income as freelancers or self-employed workers are expected to file a 1099–NEC.&nbsp;</p><p>A 1099 tax form is used to report various types of income that are unrelated to salary or wages. There are several variations of a 1099, including:&nbsp;</p><ul><li><strong>Form 1099-INT </strong>– Reports taxable interest income</li><li><strong>Form 1099-DIV</strong> – Reports dividend income</li><li><strong>Form 1099-B </strong>– Reports capital gains and losses</li><li><strong>Form 1099-MISC</strong> – Reports miscellaneous forms of income such as rental income or royalties</li></ul><p>Even if you have a salaried job, you may still need to fill out a 1099 form. For instance, if you rent out an additional dwelling unit (ADU), you may receive a 1099-MISC form from your tenants to report miscellaneous income.</p><h2>Tips on How to fill out a 1099 Form</h2><p>Like your 1040 form, there are several best practices to implement when filing your 1099 form to spare you time, money, and potential legal issues.&nbsp;</p><h3>#1 File the Right 1099 Form</h3><p>Since there are several different types of 1099s, it can be confusing to know what type of 1099 you need. It is critical to know how to fill out and submit the correct one.</p><p>Depending on your situation, you may only need to fill out one 1099 form, or you may be expected to fill out several different forms.&nbsp;</p><p>You should double-check to ensure that you receive a 1099 form for any income you received aside from salary or wages. Typically, that will be sent over from the person or organization that paid for your services. But, if you do not receive a 1099, you’re still responsible for reporting that income on the tax return.&nbsp;</p><h3>#2 Don’t Forget State Taxes&nbsp;</h3><p>In addition to federal taxes, you may also be responsible for paying state and local taxes on the additional income. Be sure to include 1099 income on your state and local tax returns as well.&nbsp;</p><h3>#3 Don’t Write off Personal Expenses&nbsp;</h3><p>When you operate independently, especially if you work at home, the waters between personal and business expenses can get quite murky.&nbsp;</p><p>For instance, if you use a phone or computer for both business and personal reasons, can you write it off?&nbsp;</p><p>You may be able to write off a portion of that. But not all. You can only deduct the percentage that is used exclusively for business purposes.</p><h3>#4 Pay Quarterly Taxes&nbsp;</h3><p>If you’re self-employed and owe at least $1,000 in taxes, you’re expected to pay your federal income taxes quarterly. To that end, you must accurately estimate and pay your quarterly taxes by the following dates in 2023:</p><ul><li>April 18, 2023</li><li>June 15, 2023</li><li>September 15, 2023</li><li>January 16, 2024</li></ul><p>Failure to pay quarterly taxes can result in fines and penalties. Most small businesses will also have to pay federal estimated taxes each quarter.&nbsp;</p><h2>Work with the Form 1040 and Form 1099 experts</h2><p>Filing taxes is rarely a straightforward process — no matter what form you’re filing, and calculating your sources of income and deductions can be challenging. That’s where 1-800Accountant can help. We’ll match you with a tax expert who knows the ins and outs of your industry and state tax rules. Whether you have <a class="link" href="https://1800accountant.com/services/small-business-taxes">small business taxes</a> or are a salaried employee, we can save you time and frustration, and maximize your tax savings.</p>

Reporting taxable income to the Internal Revenue Service (IRS) isn&#8217;t always a straightforward process. There are over 800 tax forms, from individual documents to information returns, which can create confusion and questions. This includes the common question: what is the difference between 1040 and 1099 tax forms? IRS Form 1040 and 1099 are pivotal for [&hellip;]

Comparison of u.s. tax forms 1040 and 1099 with the title "1040 vs. 1099 explained" across the image.

1040-vs-1099

The 1040 vs. 1099 Tax Form Explained

Discover the potential advantages of the standard deduction for the tax year 2022-2023. Explore how it can lower your taxable income and lead to significant tax savings.

<p>Tax deductions are crucial for filing your tax return if you don’t want to pay more than your fair share.<a class="link" href="https://1800accountant.com/blog/tax-deductions-work"> Tax deductions work by deducting eligible expenses</a> from your overall taxable income. Less taxable income means owing less in taxes, and it can even mean slipping down a tax bracket. Knowing how much your tax deductions can help you make crucial tax deductions.&nbsp;</p>



<p>The expenses you can claim for deductions are not meant to be counted toward your taxable income. These are essential costs, and the IRS is intentional about not taxing the money that goes to paying them. Enter: tax deductions.&nbsp;</p>



<p>However, the system for claiming deductions is complicated, and it requires keeping records of expenses. Not everyone has a comprehensive paper trail of all their deductible expenses ready to put together for their 1040. That’s a lot of work for both the individual and the IRS.</p>



<p>One way the government makes this process smoother is with the standard deduction. This is the primary deduction option individual taxpayers should be aware of. Whether or not you claim it, it’s essential to understand how it works. Here’s what you need to know:</p>



<h2>What is the Standard Deduction?</h2>



<p><a class="link" href="https://www.irs.gov/taxtopics/tc551" target="_blank" rel="noreferrer noopener">The IRS offers the standard deduction</a> as a sizable tax deduction available to most individual taxpayers in the United States. It allows you to deduct a portion of your income from your total taxable income without claiming or proving your eligibility for specific tax deductions.&nbsp;</p>



<p>It effectively functions as a shortcut, allowing you to assume a certain amount of tax-deductible expenses and contributions, whether or not you have any records to suggest as much.&nbsp;&nbsp;&nbsp;</p>



<p>To be eligible for the standard deduction, you must be a U.S. citizen or legal resident. You can’t have a spouse filing separately with itemized deductions, and your tax return must be for a whole 12-month period.</p>



<h2>How Much is the Standard Deduction for 2022 and 2023?</h2>



<p>The IRS (Internal Revenue Service) generally makes<a class="link" href="https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2022" target="_blank" rel="noreferrer noopener"> tax inflation adjustments each year to the standard deduction</a>, increasing it over time to keep pace with economic change. For the 2023 tax year, the standard deduction is $13,850 for a single individual and $27,700 for a married couple filing jointly.&nbsp;&nbsp;</p>



<p>For the 2022 tax year, which will apply as you file your tax return in April 2023, the single standard deduction is $12,950, while the deduction for a married couple filing together is $25,900.&nbsp;</p>



<p>Recent laws have increased the standard deduction significantly from what it was in the past, and it will continue to grow regularly.</p>



<h3>Increase for Senior Citizens</h3>



<p>Taxpayers 65 years or older get an increase in the standard deduction, further shielding them from a heavy tax burden. Single individuals get $1,850 more. A married couple filing jointly gets $1,500 more deducted for each spouse 65 or older.&nbsp;</p>



<h2>Standard vs. Itemized Deductions</h2>



<p>Itemized deductions involve presenting the IRS with a complete list of the tax deductions you are claiming and the amount of money they deduct from your taxes. You must present each deduction with valid documentation. This requires careful record management of your deductible expenses and the relevant receipts.</p>



<p>Here are a few of the deductions you can claim if you are itemizing your deductions:</p>



<ul>
<li>Mortgage interest</li>



<li>Student loan interest</li>



<li>Property taxes and certain other taxes</li>



<li>Charitable contributions</li>



<li>Medical costs</li>
</ul>



<p>If you claim the standard deduction, you take the shortcut and waive your right to claim specific deductions for individual taxpayers. It is a substitute option that functions in place of itemized deductions.</p>



<p>These deductions function separately from those you can claim as a small business owner if you earn income from self-employment.</p>



<h3>Charitable Contributions in the 2022 Tax Year</h3>



<p>While the rules explained above regulate how the standard deduction works in a typical year, the last couple of years has brought about unexpected changes. For the 2022 tax year, the IRS has adjusted the rules slightly to encourage charitable donations.&nbsp;</p>



<p>When you file your tax return for the 2022 tax year, you can claim deductions for donations you made to qualifying charities. This is done by itemizing deductions on your Schedule A in order to take a charitable tax deduction. It is also important to note that for 2022, the usual 60% AGI ceiling on charitable cash contribution is restored.&nbsp;</p>



<h2>When is it Better to Claim the Standard Deduction?</h2>



<p>The right option for you will depend on your particular tax situation. The only way to know for sure which is best is to add up every deduction available for you and find out whether the total is higher than the dollar amount already available with the standard deduction.&nbsp;</p>



<p>If you aren’t eligible for many deductions or don’t have the records or receipts to quantify and prove your itemized deductions, then it is likely a better choice for you to claim the standard deduction. If your situation isn’t clear, you can work with an accountant to figure out the best way forward.&nbsp;</p>



<h2>Work with an Accountant to Maximize your Deductions</h2>



<p>Find an accountant you can trust to help calculate payroll tax and work with you to increase your savings. This can come in the form of federal tax, property tax, social security tax, payroll tax, and more. &nbsp;Overall, this will help you prepare your tax documents checklist and get the notable tax forms. &nbsp;An expert can help you take advantage of every opportunity now and even prepare you for the future. They can help you set up a better record-keeping process for tracking deductible expenses in the future.&nbsp;</p>



<p>With enough planning, you can also schedule your deductible expenses to maximize deductions across multiple years. This way, you can alternate in different years between the standard deduction and itemized deductions, maximizing your overall tax savings over time.&nbsp;&nbsp;</p>



<p>Connect with <a class="link" href="https://1800accountant.com/services/small-business-taxes">tax professionals</a> at 1-800Accountant and make sure you maximize your deductions and get the optimal outcome on your tax return. Get the help you need and the savings you deserve<a class="link" href="https://1800accountant.com/services/income-taxes"> when you file your income tax return</a>.</p>

Tax deductions are crucial for filing your tax return if you don’t want to pay more than your fair share. Tax deductions work by deducting eligible expenses from your overall taxable income. Less taxable income means owing less in taxes, and it can even mean slipping down a tax bracket. Knowing how much your tax [&hellip;]

Notepad with the title "claiming tax deductions" displaying a list on a wooden desk, alongside a pen, smartphone, and keyboard.

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Standard Deduction for 2022-2023: Everything You Need to Know

<p>With tax season upon us, it's time to prepare your <a class="link" href="https://1800accountant.com/blog/end-year-tax-checklist">tax documents checklist</a>. Small business owners know that now is the time for tax preparation for 2023. Whether you’re a seasoned business owner or you’ve just passed your one-year anniversary, you know that there’s a lot of planning that goes into running a successful business. As a small business owner, there’s a lot to juggle between marketing strategies, inventory, budgeting, and taxes. Wondering how to file small business taxes efficiently? Take some time to read up on these small business end-of-year tax tips to get a jumpstart on the upcoming tax season. Your future self will thank you for a smoother tax filing!</p>



<h2><strong>Small Business Tax Planning and Tax Preparation: What’s changed for 2023?</strong></h2>



<p>The COVID-19 pandemic has dominated headlines since it broke out in 2019. It’s no surprise that this year has brought a new topic of intense focus: inflation. </p>



<p>From the gas pump to the grocery stores, inflation has impacted Americans a great deal.&nbsp;</p>



<p>In November 2021, the IRS (Internal Revenue Service) announced its<a class="link" href="https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2022" target="_blank" rel="noreferrer noopener"> annual inflation adjustments</a> for the 2023 tax year. Here are a few notable changes to consider for tax planning for small businesses:</p>



<ul>
<li><strong>Medical Savings Account</strong>: Individuals who are covered with this type of plan must have an annual deductible of at least $2,450, which is a $50 increase from 2021. The maximum deductible is $3,700, $100 more than the previous year.</li>



<li><strong>Standard Deduction</strong>: This amount has increased for every type of taxpayer. The amount for married couples filing jointly is $25,900 (an $800 increase), and heads of households will have a standard tax deduction of $19,400 (a $600 increase). Single taxpayers and those who are married but filing separately have a standard deduction of $12,950, which is a $400 increase.&nbsp;</li>



<li><strong>Earned Income Tax Credit</strong>:<strong> </strong>The IRS has increased this amount to $6,935 for taxpayers with three or more qualifying children.</li>
</ul>



<h2>4 Small Business End-of-Year Tax Tips for 2023</h2>



<p>Small business owners have a lot of day-to-day responsibilities when it comes to managing the finances of their businesses. In addition to <a class="link" href="https://1800accountant.com/blog/small-business-bookkeeping-basics" target="_blank" rel="noreferrer noopener">small business bookkeeping</a>, you might also need to understand <a class="link" href="https://1800accountant.com/blog/small-business-payroll" target="_blank" rel="noreferrer noopener">how to run payroll</a> if you have employees. There’s also the aspect of <a class="link" href="https://1800accountant.com/services/small-business-taxes" target="_blank" rel="noreferrer noopener">small business taxes</a>, which can be quite complex for the average business owner.&nbsp;</p>



<p>When you <a class="link" href="https://1800accountant.com/blog/calculate-small-business-taxes" target="_blank" rel="noreferrer noopener">calculate your small business taxes</a>, the process will be easier if you follow some tax tips for small businesses. Consider the following practices to help ensure the process goes smoothly:</p>



<h3>1. Maintain Good Records</h3>



<p>Your tax prep would not go smoothly without concrete tax records. These records could help you calculate your estimated tax payment. Make sure you record your business expenses on a regular basis, regardless of the amount. Don’t wait until the end of the quarter or year to reflect on your spending on things like advertising or business-related travel. If you maintain detailed and accurate records and save related paperwork and receipts, you’ll have a much easier time deducting these expenses during tax season.</p>



<h3>2. Know Your Deductions and Credits</h3>



<p>Depending on the type of work you do, you may be entitled to a variety of tax deductions and tax credits. Self-employed folks and small business owners are often eligible to receive certain deductions and credits that sometimes get overlooked. It’s important to be aware of these items to <a class="link" href="https://1800accountant.com/blog/maximize-small-business-tax-deductions" target="_blank" rel="noreferrer noopener">maximize your savings</a>.</p>



<h3>3. Beware of Scams</h3>



<p>Don’t fall victim to scammers who try to take advantage of taxpayers through various sneaky methods. Some <a class="link" href="https://1800accountant.com/blog/common-irs-tax-scams" target="_blank" rel="noreferrer noopener">common IRS scams</a> involve criminals who impersonate the IRS, while other scams originate from the taxpayer who’s trying to avoid payment. The IRS releases an annual <a class="link" href="https://1800accountant.com/blog/irs-dirty-dozen-tax-scams">Di</a><a class="link" href="https://1800accountant.com/blog/irs-dirty-dozen-tax-scams" target="_blank" rel="noreferrer noopener">r</a><a class="link" href="https://1800accountant.com/blog/irs-dirty-dozen-tax-scams">ty Dozen list of scams</a> that are relevant to both taxpayers and tax professionals.&nbsp;</p>



<h3>4. Work with a CPA</h3>



<p>Hiring a Certified Public Accountant (CPA) to handle your small business taxes is perhaps one of the smartest steps you can take. CPAs stay well-informed about current tax laws and regulations, so you won’t have to worry about missing critical details or deadlines. Outsourcing this critical component of your business can also help <a class="link" href="https://1800accountant.com/blog/5-reasons-hire-accountant-help-small-business-taxes-year" target="_blank" rel="noreferrer noopener">save money </a>and allow you to spend time and energy on other important tasks.&nbsp;</p>



<h2>FAQs for Small Business Tax Planning</h2>



<h3>What is the best tax planning software for businesses?&nbsp;</h3>



<p>There are many options if you want to take the DIY route for your business taxes, but the best option is to work with an accountant or CPA. Your business may have unique needs, and a CPA will ask the right questions to ensure your taxes are filed correctly. A CPA will also help you maximize your deductions and credits so you’re not overpaying or missing out on tax savings.&nbsp;</p>



<h3>How do I calculate small business taxes?&nbsp;</h3>



<p>Unlike individual taxpayers who pay yearly, many small business owners must pay <a class="link" href="https://1800accountant.com/blog/quarterly-estimated-taxes" target="_blank" rel="noreferrer noopener">quarterly estimated taxes</a>. To do this, you’ll need to calculate a few different numbers, including your adjusted gross income (AGI), estimated total income, and taxable income. All of these will factor into your total estimated taxes, which you can divide by four to get your estimated quarterly tax payment.</p>



<h3>How much should a small business put back for taxes?&nbsp;</h3>



<p>Unfortunately, there’s no simple answer for how much you should save for paying taxes. Taxes will vary depending on your location and business structure. For example, a C-corporation will have a different tax rate than a sole proprietorship. These tax rates can range from 10% to 37%, but remember that tax deductions and credits will also affect how much you’ll need to pay.</p>



<h2>Plan Your Small Business Taxes with 1-800Accountant</h2>



<p>These end-of-year small business tax tips can help put you on the right track for 2023. However, it’s ultimately a good idea to consult with a <a class="link" href="https://1800accountant.com/services/small-business-taxes">professional CPA</a>. No two businesses are exactly alike, and it’s best to work with someone who understands the specific laws and regulations that will apply to your business.&nbsp;</p>



<p>The team at <a class="link" href="https://1800accountant.com/">1-800Accountant</a> can advise you on your tax obligations and ensure you maximize your small business tax savings.&nbsp;</p>

With tax season upon us, it&#8217;s time to prepare your tax documents checklist. Small business owners know that now is the time for tax preparation for 2023. Whether you’re a seasoned business owner or you’ve just passed your one-year anniversary, you know that there’s a lot of planning that goes into running a successful business. [&hellip;]

Person reviewing financial documents at a desk with a mug and glasses, overlaid with the text "end-of-year tax tips.

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4 Small Business End-of-Year Tax Tips for 2023

<p>As a small business owner, you'll have questions about your business, business procedures, and taxes. You may have entity-specific or business tax questions, making receiving the correct answers urgently.</p>



<p>When tax season arrives, small business owners will have questions but only a little time to receive proper answers, assistance, and next steps. Here are answers to small business tax questions that small business owners are asking.</p>



<h2>Top 10 Small Business Tax Questions</h2>



<p>Here are the top 10 questions and answers to common tax questions that small business owners have:</p>



<h3>1. Can I Use Scanned Copies of Receipts for Tax Purposes?&nbsp;</h3>



<p>Scanned copies of receipts are okay to save and submit for tax purposes, and the IRS allows this as long as your receipts are identical to the original receipts. Your scanned receipts should also contain identical information to your original copies.</p>



<p>If you experience a tax audit but have scanned copies of your receipts, you'll want to save these records. With an audit, the IRS may require you to submit paper copies of your scanned receipts.</p>



<h3>2. How Do Taxes Work with a Small Business?</h3>



<p>Small businesses will<a class="link" href="https://www.sba.gov/business-guide/launch-your-business/choose-business-structure" target="_blank" rel="noreferrer noopener"> file and pay</a> their taxes based on their business entity. Businesses can choose their tax year when they file taxes for the first time.</p>



<p>Federally:</p>



<ul>
<li>Corporations pay income tax on their profits, and their shareholders pay personal income tax from the corporation's dividends.</li>



<li>Partnerships and sole proprietorships pay personal income tax and self-employment taxes.</li>



<li>S corporations pay taxes as pass-through entities, and their shareholders pay personal income tax.</li>



<li>Sole proprietors pay both personal taxes and self-employment taxes.</li>



<li>Multiple-member LLCs can elect to pay taxes as a corporation, partnership, or S corp. Single-member LLCs can pay taxes as sole proprietors.</li>
</ul>



<p>Depending on where you operate your business, your business may also have local and state taxes. If so, you may also have to pay employment taxes and state income taxes.</p>



<h3>3. How Much Can a Small Business Make Before Having To Pay Taxes?</h3>



<p>A small business's exact amount before paying taxes depends on its entity. Corporations can use Form 1120 to determine how much they'll pay in taxes.</p>



<p>Other business entities, such as LLCs, partnerships, S Corporations, and sole proprietorships, have different considerations for determining their income. These entities require their business owners to report income on their personal income tax returns, which means you'll have both business and nonbusiness income on your tax return.</p>



<p>Independent contractors and sole proprietors will have to pay taxes if they earn $400 or more.&nbsp;</p>



<h3>4. What Business Expenses Can You Claim On Taxes?</h3>



<p>The IRS <a class="link" href="https://www.thebalancemoney.com/deductible-business-expenses-3192959" target="_blank" rel="noreferrer noopener">has two requirements</a> for what business owners can claim as their business expenses.&nbsp;</p>



<p>Business expenses must be both ordinary and necessary. Ordinary expenses are expenses similar businesses or trades commonly pay for, and necessary expenses assist you in doing your business.</p>



<p>You can claim considerable business expenses as tax deductions:</p>



<ul>
<li>Advertising</li>



<li>Automobile expenses&nbsp;</li>



<li>Entertainment and meal expenses&nbsp;</li>



<li>Maintenance and repairs</li>



<li>Home office expenses&nbsp;</li>



<li>Transportation expenses</li>
</ul>



<h3>5. What Information Does a Small Business Need For Taxes?</h3>



<p>Small businesses will need several documents to file their <a class="link" href="https://1800accountant.com/services/small-business-taxes">small business taxes</a>. These documents include the following:</p>



<ul>
<li>Business assets and business expense information</li>



<li>Financial statement</li>



<li>Home office expenses for business owners using their home as their primary business site.</li>



<li>Vehicle use information if you’re seeking a tax deduction for business vehicles.</li>
</ul>



<h3>6. What Is The Easiest Way To Pay Estimated Taxes?</h3>



<p>The easiest way to pay estimated taxes is to use the Electronic Federal Tax Payment System (EFTPS). Businesses and individuals can use EFTPS to make estimated tax payments weekly, bi-weekly, monthly, or on a different schedule.</p>



<h3>7. What Is The Penalty For Not Paying Quarterly Taxes?</h3>



<p>The penalty for not paying quarterly taxes is 0.5% of the amount not paid for each month or part of the month that the quarterly tax remains unpaid. There's a maximum penalty of 25% for not paying quarterly taxes.</p>



<h3>8. What Will Trigger an IRS Audit?</h3>



<p>Although IRS audits are infrequent, there are red flags that <a class="link" href="https://aofund.org/resource/top-10-irs-audit-triggers-and-what-do-if-audited/" target="_blank" rel="noreferrer noopener">trigger an audit</a>. Small businesses may experience an IRS audit for:</p>



<ol>
<li>Undergoing significant changes in business expenses and business income.</li>



<li>Filing an incomplete tax return.</li>



<li>File a tax return with errors.</li>



<li>Mixing business expenses with personal expenses.</li>



<li>Not making a business profit for several years.</li>



<li>Not filing a tax return if a business experiences a financial loss.</li>



<li>Operating a business that deals with a lot of cash.</li>
</ol>



<h3>9. Which Receipts Can I Claim on My Taxes?</h3>



<p>As you collect your <a class="link" href="https://www.irs.gov/businesses/small-businesses-self-employed/what-kind-of-records-should-i-keep" target="_blank" rel="noreferrer noopener">business receipts</a> throughout the year, it may become difficult to know which receipts to keep for taxes.</p>



<p>&nbsp;You can claim receipts related to the following:</p>



<ul>
<li>Expenses&nbsp;</li>



<li>Gross receipts&nbsp;</li>



<li>Purchases</li>
</ul>



<p>Receipts related to expenses will show costs your business incurs other than purchases. You can claim expense receipts, including:</p>



<ul>
<li>Account statements</li>



<li>Canceled checks</li>



<li>Cash register tape receipts</li>



<li>Credit card receipts and statements</li>



<li>Invoices</li>
</ul>



<p>There are additional receipts related to business expenses that you should keep to claim as a tax deduction. The IRS requires you to prove these expenses to claim entertainment, gifts, transportation, and travel.&nbsp;</p>



<p>Gross receipts are another receipt type you can claim on your taxes. You can claim gross receipts, including:</p>



<ul>
<li>Cash register tapes</li>



<li>Deposit information&nbsp;</li>



<li>Form 1099-MISC</li>



<li>Receipt books</li>



<li>Invoices</li>
</ul>



<p>Purchases are the last receipt type that you can claim on taxes. You may use information from your purchases to claim credits or deductions on your tax return from:&nbsp;</p>



<ul>
<li>Canceled checks</li>



<li>Cash register tape receipts&nbsp;</li>



<li>Credit card receipts and statements</li>



<li>Invoices</li>
</ul>



<h3>10. Who Has To Pay Quarterly Taxes?</h3>



<p>There are three groups of people who have to make <a class="link" href="https://1800accountant.com/services/quarterly-estimated-taxes">quarterly tax payments</a>:&nbsp;</p>



<ol>
<li>Corporations</li>



<li>People without enough tax withheld&nbsp;</li>



<li>Self-employed workers</li>
</ol>



<p>Corporations may need to pay quarterly taxes if they expect to owe at least $500.</p>



<p>Second, if you need more taxes withheld, you should make quarterly tax payments. There are two criteria the IRS has for who needs to pay quarterly taxes for those not withholding enough taxes, and you'll need to meet both requirements to pay quarterly taxes in this group.</p>



<p>The first criterion is that you'll owe at least $1,000 in federal taxes after adding your tax credits and withholding. The second criterion is that your refundable credits and withholding cover the following:</p>



<ul>
<li>Less than 90% of your tax liability for the current year</li>



<li>100% of your liability for last year</li>



<li>110% for taxpayers with an adjusted gross income of $150,000 for taxpayers filing individually, or $75,000 for taxpayers who are married and filing jointly</li>
</ul>



<p>Third, self-employed workers, including freelancers and independent contractors, should pay their quarterly taxes if they owe $1,000 or more in taxes.</p>



<h3>Work with Expert Accountants To Help Navigate Small Business Taxes&nbsp;&nbsp;</h3>



<p>Small business taxes encompass different requirements for different entities. Federal, local, and state tax requirements and multiple business entities make it critical to get your small business questions answered.<br>When you need to answer small business tax questions, it's best to work with experts. Work with the expert accountants at <a class="link" href="https://1800accountant.com/services/business-tax-advisory">1-800Accountant</a> for your small business tax needs.</p>

As a small business owner, you&#8217;ll have questions about your business, business procedures, and taxes. You may have entity-specific or business tax questions, making receiving the correct answers urgently. When tax season arrives, small business owners will have questions but only a little time to receive proper answers, assistance, and next steps. Here are answers [&hellip;]

Text overlay reading "common tax questions from small business owners" on a background of scattered paper slips with tax-related terms.

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10 Common Small Business Tax Questions Owners Are Asking

<p>Being self-employed brings with it a lot of independence. You get to make your own choices and set your own hours. You work when you want to work!</p><p>But for better or for worse, that independence also means a lot more responsibility. You’re operating your own small business, and as a result, you’re responsible for your own <a class="link" href="https://1800accountant.com/services/industry/freelancer-self-employed">income taxes and self-employed deductions</a> in a way most working people aren’t.</p><p>If you’ve never paid or filed taxes as a small business owner before, there is a lot you should know before you get started. There are numerous ways you can bring down your overall taxable income and increase the money you get to take home. If you’re not taking advantage of these tax deductions for self-employed expenses, you'll be paying more than you should.</p><h2 class="wp-block-heading">Eliminated or Changed Write-offs for Self-employed Individuals from the Tax Cuts and Jobs Act&nbsp;&nbsp;</h2><p>Small business taxes can be extra complicated because of how frequently the laws change. The tax code can vary significantly from one year to the next, meaning you have to relearn everything all over again.&nbsp;</p><p>The 2017 Tax Cuts and Jobs Act changed a lot about small businesses; many deductions and credits were adjusted or removed entirely.&nbsp;</p><p>Here are a few <a class="link" href="https://www.investopedia.com/tax-deductions-that-are-going-away-4582165" target="_blank" rel="noreferrer noopener">tax deductions that changed or went away because of the TCJA</a>.&nbsp;</p><ul><li>Personal and dependent exemptions are suspended.&nbsp;</li><li>The standard deduction was increased significantly.</li><li>The child tax credit was increased.</li><li>Deductions for commuting expenses are more limited.</li><li>Job relocation moving expenses are no longer deductible except for active-duty military personnel.&nbsp;</li><li>Alimony expenses are no longer deductible and receiving alimony payments no longer counts as taxable income.&nbsp;</li></ul><h2 class="wp-block-heading">10 Self-Employment Tax Write-Offs to Use</h2><p>Here are ten valuable write-offs of business expenses for self-employed individuals you should include on your <a class="link" href="https://1800accountant.com/blog/small-business-tax-deductions-checklist">small business tax deductions checklist</a>.&nbsp;</p><h3 class="wp-block-heading">1. Qualified Business Income Deduction</h3><p>Every year, small businesses below a certain income level can deduct 20% of their qualified business income. QBI refers to your net income but excludes income related to capital gains, interest, or income earned outside the United States.&nbsp;&nbsp;&nbsp;</p><h3 class="wp-block-heading">2. Self-Employment Tax Deduction</h3><p>As a self-employed individual, you have to pay a higher percentage of your income into Social Security and Medicare, for a total of 15.3%. However, you can claim a deduction for half of that. 7.65% of your self-employment tax can be claimed as a business expense and not counted for your taxable income.&nbsp;</p><h3 class="wp-block-heading">3. Home Office Deduction</h3><p>Another significant source of savings is the <a class="link" href="https://1800accountant.com/blog/home-office-deduction">home office deduction</a>. However, simply working from home isn’t enough to claim this deduction. You must have a dedicated space in your home that is only used for your business, and it has to be a primary site for your work.&nbsp;</p><p>If you’re eligible for this deduction, you can claim a portion of all your home-related costs as business expenses. You can deduct a portion of your rent or mortgage and other important home repair costs in proportion to the space of your home office. All of that is in addition to the costs of any office supplies or goods you use exclusively for work.&nbsp;</p><h3 class="wp-block-heading">4. Health Insurance Premium Deduction</h3><p>If you’re not eligible for health insurance through your spouse, you can also count your health insurance premiums as a business expense. Effectively you are your own employer paying for your employee’s health insurance, so that cost should be paid with pre-tax income.&nbsp;</p><h3 class="wp-block-heading">5. Vehicle Use Deduction</h3><p>Do you frequently use your vehicle for business purposes? Commuting costs don’t count here, but other work-related travel costs can be deducted, either for a company car or your own personal vehicle.&nbsp;</p><p>To claim this deduction, you can either keep detailed records of your vehicle expenses or simply log the miles traveled for business purposes. The IRS has established a <a class="link" href="https://www.irs.gov/newsroom/irs-issues-standard-mileage-rates-for-2023-business-use-increases-3-cents-per-mile" target="_blank" rel="noreferrer noopener">standard mileage rate</a> for tax purposes, and in 2023, most businesses can claim a deduction of 65.5 cents per mile for business, medical, charitable, or moving-related travel.</p><h3 class="wp-block-heading">6. Internet and Phone Bills Deduction</h3><p>How much do you spend on internet and phone bills? These may also be deductible expenses as far as they’re used for your business. For a home office or a personal phone that you also use for business costs, you can deduct a fraction of the total cost based on an estimate of your relative business use.</p><p>On the other hand, you might have a separate phone used only for work or even a separate internet subscription. In that case, you can deduct the full cost of those bills as necessary expenses for your business.&nbsp;&nbsp;</p><h3 class="wp-block-heading">7. Meals Deduction</h3><p>Under certain specific circumstances, you can deduct all or part of the costs related to meals or entertainment purchased as part of your work. If you take clients out for meals or bring food to your workplace to share with others, then those costs are 50% deductible.&nbsp;</p><p>There are also a few meal-related costs that can be fully deducted. To be 100% deductible, it must be food or entertainment provided as part of a party for the entire company at once, or it must be something officially included as compensation for your employees for whatever purpose.&nbsp;</p><h3 class="wp-block-heading">8. Retirement Plan Contributions</h3><p>Every year you’re permitted to deduct a significant amount of money for payments you make directly into your retirement plan. This allows you to defer paying taxes on that income until you withdraw that money later.&nbsp;</p><p>It would be wise to max out your deductible retirement contributions before the end of each year, especially if you’re likely to find yourself in a higher income tax bracket.&nbsp;</p><h3 class="wp-block-heading">9. Interest</h3><p>While the principal on many loans can’t be deducted, you can deduct the interest on loans, including your home mortgage, even if you don’t have a home office.</p><h3 class="wp-block-heading">10. Education</h3><p>The IRS sees continuing education as a regular and necessary part of the job. Any money you spend to help you do your job better or keep up with industry developments is money you can deduct for education expenses.&nbsp;</p><p>This also covers any fees you pay for professional publications or association memberships.&nbsp;</p><h2 class="wp-block-heading">Maximize Your Tax Savings With 1-800Accountant</h2><p>It takes serious dedication and know-how to efficiently utilize the tools available to reduce your taxable income and final tax bill.</p><p>It might seem overwhelming, but it doesn't have to be with 1-800Accountant in your corner. Let our <a class="link" href="https://1800accountant.com/services/small-business-taxes">experts handle your taxes</a> while you dedicate time and resources to growing your business. You’ll be able to rest easy knowing America's leading virtual accounting firm isn't leaving potential savings behind.</p>

Being self-employed brings with it a lot of independence. You get to make your own choices and set your own hours. You work when you want to work! But for better or for worse, that independence also means a lot more responsibility. You’re operating your own small business, and as a result, you’re responsible for [&hellip;]

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Top 10 Tax Write-Offs for Self-Employed Individuals

<p><a href="https://1800accountant.com/blog/prepare-file-small-business-tax-return"><span style="font-size: 11pt;"><strong>Filing business taxes</strong></span></a><span style="font-size: 11pt;">&nbsp;is an essential responsibility as a small business owner, but it can be complicated, especially if you're not prepared. One thing leads to another, and you can fall further and further behind.</span></p><p><span style="font-size: 11pt;">The good news is it's not too late to file a return for back taxes in 2026, even if you're past the due date for your tax return. The more significant challenge lies in filing back taxes without records.&nbsp;</span></p><p><span style="font-size: 11pt;">Preparing your tax return will be difficult if you don't have a complete accounting of your finances. How can you pay what you owe if you don't know all of the income you've received? Fortunately, you have options. Use this blog to learn how to file back taxes without records in 2026.&nbsp;</span></p><h2><strong>Why You Should File Back Taxes for Your Small Business</strong></h2><p><span style="font-size: 11pt;">There are several reasons to file your income tax returns, even if you are far beyond the deadline. Even late, it’s worth the effort to avoid what happens if you&nbsp;</span><a href="https://1800accountant.com/blog/what-happens-if-you-dont-file-taxes"><span style="font-size: 11pt;"><strong>don’t file business taxes</strong></span></a><span style="font-size: 11pt;">.&nbsp;</span></p><p><span style="font-size: 11pt;">If you don't file a return, the IRS will eventually file a substitute return based on its data to estimate what you owe. It isn't likely that the IRS will include every benefit and deduction you're eligible for, which would have reduced your tax liability. You will also surrender any possible tax refunds if you don’t file a return.&nbsp;</span></p><p><span style="font-size: 11pt;">There is also a failure to file penalty that you'll be responsible for paying. If you have unpaid taxes, that amount will grow each month you continue without filing a late return, for up to 5 months afterward.&nbsp;</span></p><p><span style="font-size: 11pt;">You should make every effort to catch up on unfiled taxes to claim your deductions and receive your refund.&nbsp;</span><a href="https://1800accountant.com/services/small-business-taxes"><span style="font-size: 11pt;"><strong>Filing your small business taxes</strong></span></a><span style="font-size: 11pt;">&nbsp;also helps ensure you've paid everything you owe, no matter how late you file. Unpaid taxes will rack up significant fines over time, and the IRS will eventually act to collect them on its own if you don't pay.</span></p><h2><strong>How Many Years Back Can You File Delinquent Taxes?</strong></h2><p><span style="font-size: 11pt;">The IRS will accept past-due tax returns. However, if you want to claim a tax refund or credit, you must file your return within three years of the original deadline.&nbsp;</span><a href="https://www.irs.gov/businesses/small-businesses-self-employed/filing-past-due-tax-returns"><span style="font-size: 11pt;"><strong>Filing past-due tax returns</strong></span></a><span style="font-size: 11pt;">&nbsp;aren't worth the effort if you go further back than that.&nbsp;</span></p><p><span style="font-size: 11pt;">You should file past taxes for at least the last three years to claim any benefits you left behind, ideally up to the previous six years. How many years you can file back taxes will typically depend on the data you still have from those years.&nbsp;</span></p><h2><strong>How To File Back Taxes Without Records</strong></h2><p><span style="font-size: 11pt;">You don't want to file alone, especially when you're missing significant records. You can file back taxes just like any other IRS Form 1040, U.S. Individual Income Tax Return.&nbsp; &nbsp;</span></p><p><span style="font-size: 11pt;">The IRS will accept your past-due federal tax returns as soon as you submit them. For state tax issues, you should look up your individual state's policies or speak to an&nbsp;</span><a href="https://1800accountant.com/services/business-tax-advisory"><span style="font-size: 11pt;"><strong>accounting professional</strong></span></a><span style="font-size: 11pt;">.&nbsp;</span></p><p><span style="font-size: 11pt;">If you don't have a good record of your finances over the period in question, however, it will be more challenging to figure out your tax bill. Here’s how to get started:</span></p><h3><strong>Collect Financial Records</strong></h3><p><span style="font-size: 11pt;">To file your return, the first thing you need to do to get started is to collect all the financial data you can find on the tax years in question. You may not have consistent or reliable bookkeeping, but there must be some clues or records you can refer to that will help you assess your tax liability.&nbsp;</span></p><p><span style="font-size: 11pt;">These are some of the most common sources you might be able to use to put together your past-due tax return:&nbsp;</span></p><ul><li><p><span style="font-size: 11pt;">Bank account and credit card statements</span></p></li><li><p><span style="font-size: 11pt;">Tax forms like W-2s and Social Security statements</span></p></li><li><p><span style="font-size: 11pt;">Receipts from business expenses</span></p></li><li><p><span style="font-size: 11pt;">Emails or paper records of transactions</span></p></li></ul><h3><strong>Requesting Tax Transcripts</strong></h3><p><span style="font-size: 11pt;">You might not find enough information to go into your records alone. Fortunately, the IRS also holds various documents and forms for at least three years. You can request IRS tax transcripts with IRS Form 4506-T to&nbsp;</span><a href="https://www.irs.gov/individuals/get-transcript"><span style="font-size: 11pt;"><strong>get your tax record</strong></span></a><span style="font-size: 11pt;">.&nbsp;</span></p><p><span style="font-size: 11pt;">There are a few distinct kinds of tax transcripts you may be able to request:&nbsp;</span></p><ul><li><p><span style="font-size: 11pt;">Transcripts of tax returns you submitted in a prior year</span></p></li><li><p><span style="font-size: 11pt;">A report on your basic filing status and taxable income according to IRS records</span></p></li><li><p><span style="font-size: 11pt;">A wage and income transcript brings together 1099s, W-2s, and any other relevant paperwork the IRS has received from other businesses or financial institutions.</span></p></li></ul><h3><strong>Work with Forensic Accounting Experts</strong></h3><p><span style="font-size: 11pt;">If you’re struggling and still don’t know how to file back taxes without W-2s or other records, you may need to contract with a tax professional or a team with specialties in forensic accounting. Forensic accounting specializes in investigating and reconstructing business activity without regular records.&nbsp;</span></p><p><span style="font-size: 11pt;">You want to be sure you get your tax return prepared correctly, so you want to work with professionals who know how to put the data together, maximize your savings, and get it done right to help&nbsp;</span><a href="https://1800accountant.com/services/audit-defense"><span style="font-size: 11pt;"><strong>defend you from a potential audit</strong></span></a><span style="font-size: 11pt;">.&nbsp;</span></p><h2><strong>How 1-800Accountant Can Help With Your Delinquent Business Taxes in 2026</strong></h2><p><span style="font-size: 11pt;">If you’re trying to file back taxes without records, you may need tax preparation help from the experts. When you trust 1-800Accountant, America's leading virtual accounting firm, our accountants can help file back taxes for your company and get you back on track with your bookkeeping obligations, ensuring smooth operations in the future.&nbsp;</span></p>

Filing taxes for your business is essential to your responsibilities as a small business owner, but it can be complicated, especially if you&#8217;re not prepared. One thing leads to another, and you can fall further and further behind on your taxes. Even if you&#8217;re past the due date for your tax return, it&#8217;s not too [&hellip;]

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How to File Back Taxes Without Records For Your Small Business

<p>Tax liability is something that affects all small businesses. For small businesses, several factors play into tax liability, such as business entity type, due dates, and specific taxes owed.</p><p>Small businesses can reduce their tax liability by implementing tax-saving strategies. There are ways to save money for yourself and your employees for almost every business entity. Continue reading to learn more about how to reduce tax liability as a small business owner.</p><h2>What Is Business Tax Liability?</h2><p>Small business tax liability is <a class="link" href="https://www.sba.gov/business-guide/manage-your-business/pay-taxes" target="_blank" rel="noreferrer noopener">the tax owed</a> on your business income, and your business entity type determines your tax liability at the federal and state levels.&nbsp;</p><p>Federally, all businesses will pay taxes based on their business entity. Some federal payments require payments throughout the year. You may also have federal tax payment requirements if your small business has employees. However, for those businesses functioning as pass-through entities, the tax liability is carried by the S Corporation shareholder or by the partner in a partnership at the federal level. State rules can differ for business entities.&nbsp;</p><p>Your tax liability can be for employment and income taxes at the state level. Your business entity will also determine your tax liability for state taxes. For businesses with employees, you can expect to pay different taxes.&nbsp;</p><p>Although this differs by state, you can expect to pay these business state taxes:</p><ul><li>Temporary disability insurance</li><li>Unemployment insurance tax</li><li>Workers’ compensation insurance</li></ul><h2>Different Types of Business Taxes?</h2><p><a class="link" href="https://www.usa.gov/small-business" target="_blank" rel="noreferrer noopener">Many business taxes</a> apply to small businesses:</p><ul><li>Employment tax</li><li>Estimated tax</li><li>Excise tax&nbsp;</li><li>Income tax</li><li>Property tax</li><li>Sales and use tax</li><li>Self-employment tax&nbsp;</li></ul><p>Employment taxes apply to employers who have employees. There are four employment taxes:&nbsp;</p><ul><li>Federal income tax withholding</li><li>Federal unemployment insurance tax (FUTA)&nbsp;</li><li>State unemployment insurance tax (SUI)</li><li>Medicare and Social Security taxes</li></ul><p><a class="link" href="https://1800accountant.com/services/quarterly-estimated-taxes">Estimated taxes</a> are another business tax from income not subject to tax withholding. You can pay estimated taxes if you don't withhold taxes voluntarily.&nbsp;</p><p>Estimated taxes include income from:&nbsp;</p><ul><li>Dividends</li><li>Interest&nbsp;</li><li>Self-employment</li></ul><p>Excise taxes are taxes you'll pay for using certain goods or services. You’ll pay excise taxes if your small business:&nbsp;</p><ul><li>Manufactures or sells certain products</li><li>Operates certain kinds of businesses&nbsp;</li><li>Receives payment for specific services</li><li>Uses various types of equipment, facilities, or products</li></ul><p>Income tax is another business tax. Most business entities will pay federal income tax, except partnerships. Instead, those individuals within a partnership will report their profits and losses on their individual tax returns.</p><p>States also charge income tax on businesses. Not every state charges businesses income tax, so this portion of income tax can vary depending on where your small business operates.</p><p>Property tax is a business tax that affects business owners. States have different categories on which properties are taxable.&nbsp;</p><p>Some states collect property tax for businesses based in commercial real estate locations. Other states can collect property tax based on the following, which are referred to as tangible personal property taxes:&nbsp;</p><ul><li>Business assets&nbsp;</li><li>Business vehicles</li><li>Computer equipment</li></ul><p>Sales and use tax is another tax that states may charge small businesses taxes for their use of goods and services whenever sales taxes aren't collected.&nbsp;</p><ul><li>When this occurs, it may apply to goods and services purchased out of state.&nbsp;</li><li>There are exclusions to what states can charge sales tax, including food, medicine, and utilities.</li></ul><p>Self-employment tax is the last business tax that business owners may be subject to, which applies to those who own their business.&nbsp;</p><h2>4 Ways To Reduce Small Business Tax Liability&nbsp;</h2><p>There are four ways to reduce the tax burden for <a class="link" href="https://www.thebalancemoney.com/ways-to-save-on-business-taxes-397610" target="_blank" rel="noreferrer noopener">small business owners</a>:</p><h3>Set Up and Fund Your Retirement Plan</h3><p>The first way to reduce taxable income is to set up a retirement plan. Small business owners can set up a retirement plan for themselves and their employees if their business entity has employees.</p><p>If you set your retirement plan as a qualified plan, you may qualify for additional tax savings.&nbsp;</p><h3>Qualified Busines Income Tax Deduction</h3><p>The second way to reduce taxable income is to use the Qualified Business Income Tax Deduction. The Qualified Business Income Tax deduction allows three pass-through business entities to deduct 20% of their qualifying business income:&nbsp;</p><ul><li>A partnership</li><li>A sole proprietorship</li><li>An S Corporation</li></ul><p>You can claim this deduction on top of claiming other business tax deductions, and you can claim this deduction whether you’re a single filer or if you’re married and filing jointly. For most businesses, there are income limits for this deduction.</p><h3>Take Tax Credits</h3><p>The third way to reduce the taxes you owe is to take tax credits. Small businesses may qualify for various business tax credits related to:&nbsp;</p><ul><li>Hiring employees</li><li>Providing health coverage to employees</li><li>The environment</li><li>Work opportunities&nbsp;</li></ul><h3>Tax Deductions</h3><p>The fourth way small businesses can reduce their taxes is by using<a class="link" href="https://1800accountant.com/blog/small-business-tax-deductions-checklist"> tax deductions</a>. There are deductions beyond The Qualified Business Income deduction, which can help your small business and its tax liability. These deductions apply to:</p><ul><li>Business equipment</li><li>Real estate</li><li>Machinery</li><li>Vehicles</li></ul><p>Working with <a class="link" href="https://1800accountant.com/blog/hiring-tax-professional-small-business">a tax professional</a> will help you know which tax credits and deductions you qualify for.</p><h2>When Are Business Taxes Due?</h2><p>Business taxes have <a class="link" href="https://www.irs.gov/faqs/small-business-self-employed-other-business/starting-or-ending-a-business/starting-or-ending-a-business-3" target="_blank" rel="noreferrer noopener">different due dates</a> based on the type of business entity and when its year ends.&nbsp;</p><ul><li><strong>C corporations</strong> can choose a fiscal year-end date</li><li><strong>Partnerships</strong> mostly use the calendar year for business tax payments</li><li><strong>S corporations</strong> use the calendar year to establish their due date</li></ul><h3>Business Entity Due Dates</h3><div class="rte-table-container"><table><thead><tr class="table-data-container"><td class="cell-0">Business Entity</td><td class="cell-0">Tax Return Due Date</td></tr></thead><tbody><tr class="table-data-container"><td>Corporations</td><td>April 15</td></tr><tr class="table-data-container"><td>Partnerships</td><td>March 15</td></tr><tr class="table-data-container"><td>S Corporations</td><td>March 15</td></tr><tr class="table-data-container"><td>Single-member LLCs</td><td>April 15</td></tr><tr class="table-data-container"><td>Sole Proprietorships</td><td>April 15</td></tr></tbody></table></div><p>Please note that for single-member LLCs and sole proprietorships, the due date aligns with the individual tax filing due date (Form 1040).</p><h3>LLCs Filing As Due Dates</h3><p>LLCs with multiple members can elect to pay business taxes as a corporation, partnership, or S Corporation, which presents three due date options depending on the chosen entity type:&nbsp;</p><div class="rte-table-container"><table><thead><tr class="table-data-container"><td class="cell-0">LLC Filing Type</td><td class="cell-0">Tax Return Due Date</td></tr></thead><tbody><tr class="table-data-container"><td>LLC filing as a Partnership</td><td>March 15</td></tr><tr class="table-data-container"><td>LLC filing as a Corporation</td><td>April 15</td></tr><tr class="table-data-container"><td>LLC filing as an S corp</td><td>March 15</td></tr></tbody></table></div><h3>Quarterly Estimated Tax Due Dates</h3><p>If you’re subject to estimated taxes, there are additional deadlines. Estimated taxes are due quarterly on:&nbsp;</p><div class="rte-table-container"><table><thead><tr class="table-data-container"><td class="cell-0">Payment Period</td><td class="cell-0">Estimated Tax Due Date</td></tr></thead><tbody><tr class="table-data-container"><td>January 1 - March 31</td><td>April 15</td></tr><tr class="table-data-container"><td>April 1 - May 31</td><td>June 15</td></tr><tr class="table-data-container"><td>June 1 - August 31</td><td>September 15</td></tr><tr class="table-data-container"><td>September 1 - December 31</td><td>January 15</td></tr></tbody></table></div><p>However, in practice, estimated tax payments are credited when paid.</p><h2>Reduce Your Tax Liability by Partnering With an Expert</h2><p>Determining your tax liability can help you, your employees, and your small business. Given how many variables there are to determine tax liability, you’ll want to work with tax professionals.</p><p>Small business owners may have several taxes to pay, but you have options available. When you need help with small business taxes, you’ll want to ensure you get the help you need. Work with the <a class="link" href="https://1800accountant.com/services/small-business-taxes">small business tax accountants</a> at 1-800Accountant for your small business tax needs.</p>

Tax liability is something that affects all small businesses. For small businesses, several factors play into tax liability, such as business entity type, due dates, and specific taxes owed. Small businesses can reduce their tax liability by implementing tax-saving strategies. There are ways to save money for yourself and your employees for almost every business [&hellip;]

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How To Reduce Tax Liability For Small Businesses

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