The Basics of Tax Prep for Small business Owners

If you are self-employed or own a small business, there is no question that tax season is a stressful time. As a result, you may benefit from the services of a professional sacramento cpa‏. However, before  schedule an appointment with a CPA, you need to get ready. Some steps to take before your meeting are explained here.

Determine if it will Pay to File on Your Own

If you want to file your taxes on your own, the IRS offers a free software program. If you have a straightforward return with no deductions, this may be a good option. However, the majority of people who are self-employed or own a small business have a more complicated return with things to take into account such as depreciation, expense deductions and income from the pass-troughs. This type of return will almost always require professional assistance. The one good piece of information is the amount you pay for tax prep services is deductible.

Get Yourself Prepared

Your appointment with a tax preparer will be much easier if you show up with some of the figuring already completed. The majority of tax preparers give clients a document that shows the numbers from the past years, which can be used as a starting point. This eliminates the tax preparer from having to go through all of your receipts, which will take them a significant amount of time and cost you more.

Collect all Necessary Paperwork

While this may seem a bit obvious, there are some business owners who never show up with their corporate returns or partnership returns, 1099s and W-2s or their Schedule K. You need to bring in the balance sheet and income statement if you have them as well as receipts for any type of fixed asset you may have purchased the prior year. It is important to bring in all associated documentation, which will help the process run much more smoothly.

Ask Questions

Be sure you ask your CPA any questions you may have. This can be about the return or your taxes in general. It is important that you understand your tax liability and what you are responsible for. When you understand the process for filing your tax return it can help you to prepare better for next year’s return and may even minimize the work you have to do at the end of the year.

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