Is this your first year filing taxes for your business? Are you ready now? The filing deadline for Partnerships (1065), S-corp (1120-S), and multi-member LLCs is March 15, 2024. If you still need time to get your paperwork in order, you can file an extension by March 15, 2024 to give you an additional 6 months to file.
If you are ready, here are some tips to help you file your taxes and make it much easier.
Filing Business Taxes
Before filing taxes for your business, you’ll want to get all your ducks in a row with your finances. Even though the deadline is this week, you can get it done. What does that entail?
- Gather your financial statements. Have ready your financial statements for the year, including your income statement and your balance sheet.
- Review your financial statements. Now that you have the information available, go ahead and make sure all your income and expenses for your business are included in your income statement (also known as a profit and loss statement). Make sure your balance sheet is correct- all your assets, liabilities, and equity should be included.
- Reconcile your bank account. You want to verify that all of your transactions are accounted for and what your statement says on paper matches what’s actually in your bank account. Should the amounts not match, carefully examine your bank statement for any outstanding bank fees and interest earned. Also, examine your bank reconciliation for old outstanding deposits and checks. A deposit posted in error could make your financial picture look better than it is and cost you more in taxes.
- Adjust for Book Accounting and Tax Accounting Differences (M-1 Adjustments). A typical M-1 adjustment is an adjustment for Travel and Entertainment Expenses. On your company’s income statement, you are allowed to deduct 100% of Travel and Entertainment Expenses, however for tax purposes, you are allowed 50% of the travel and entertainment expenses so you have to make an adjustment. TurboTax can automatically make this and other M-1 adjustments for you.
By the way, if you’re looking to make getting your financial documentation together easier, using software like QuickBooks can cut down on your time. If you’re new to filing business taxes, then it can be a lifesaver. Once you have your financial statements in order, TurboTax can also make filing your business tax return easy.
Curious to know upcoming deadlines for next year? The IRS site provides a tax calendar for small businesses.
Thoughts on Filing Taxes
I’d love to hear your thoughts about filing an extension and paying taxes for your small business. How many are filing taxes for your business the first time? How do you organize your finances throughout the year?
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