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Level 1

Tax preperation for small business owners.

My start up business is brand new, yet to have filed taxes. Would you look at that? Tax Season is here already :smileysurprised: Lol.  I'm looking for a little guidence in my first year filing. With a few simple questions to start, such as:

1.) What am I supposed to write off as a business?
2.) How many times do you file every year? I've heard every 3 months, 2 times a year or just annually like usual. 
3.) Am I filing individually as one person or person + my business? 
4.) Tax write off's, how do I print in quickbooks a summary of my taxes to be written off? I.e - fuel, food, travel, maintence, utilities. 

 

 

 

Thanks for your help and guidence!

Solved
Best answer February 17, 2018

Best Answers
Highlighted
Level 7

Tax preperation for small business owners.

Hi @CTTS53017, welcome to QB Community. Congrats on your new venture!

 

Yeah, taxes. **sigh**

 

You can find some great tax resources and information in the Taxes section of our Learning and Support page. In particular, "New Small Business? 5 Things to Know About Federal Income Taxes" might be a good place to start. Hope that helps!

View solution in original post

Highlighted
Level 5

Tax preperation for small business owners.

1. Keep this easy tip in mind:

 

Business expenses are always deductible.  Personal expenses are never deductible (as business expenses).

So, everything related to the business you should clearly track.  One easy way is to get a separate business checking account and debit/credit card.  Use it only for business.  This keeps all the business transactions in one location, which makes record keeping straightforward.

 

Then you have the "mixed" type expenses:  cell phone, internet, etc.  Generally speaking, if you cannot run the business without that expense, then I will deduct it as a business expense.  My cell phone is primarily used for my business, and I could not run my business without it, so that goes in the business bucket.  Same with internet for me.  For some other businesses, though, this may not be applicable, especially a part-time business.  In this case, I will ask the client to estimate how much of the phone use is business vs personal, then apply that ratio to the phone cost.  It's "reasonable."

Mileage is a special case.  Use a mileage log, either written on a phone app and only deduct business miles. 

2. If you have a W-2 job, and have enough taxes withheld, you don't have to worry about making quarterly estimated tax payments.  If you are self employed, then you need to estimate your quarterly income and make a tax payment.

 

3. Business income and expenses are reported on Sch C for a sole proprietor.  This income/loss flows into your 1040.  Depending on where you live, you may or may not have a state tax obligation (franchise tax, sales tax, etc).

4.  QB profit and loss statement.

Good luck,

Mark Wagner CPA

View solution in original post

6 Comments 6
Highlighted
Level 7

Tax preperation for small business owners.

Hi @CTTS53017, welcome to QB Community. Congrats on your new venture!

 

Yeah, taxes. **sigh**

 

You can find some great tax resources and information in the Taxes section of our Learning and Support page. In particular, "New Small Business? 5 Things to Know About Federal Income Taxes" might be a good place to start. Hope that helps!

View solution in original post

Highlighted
Level 1

Tax preperation for small business owners.

I'm in the same boat. Please share what you find!

Highlighted
Level 5

Tax preperation for small business owners.

1. Keep this easy tip in mind:

 

Business expenses are always deductible.  Personal expenses are never deductible (as business expenses).

So, everything related to the business you should clearly track.  One easy way is to get a separate business checking account and debit/credit card.  Use it only for business.  This keeps all the business transactions in one location, which makes record keeping straightforward.

 

Then you have the "mixed" type expenses:  cell phone, internet, etc.  Generally speaking, if you cannot run the business without that expense, then I will deduct it as a business expense.  My cell phone is primarily used for my business, and I could not run my business without it, so that goes in the business bucket.  Same with internet for me.  For some other businesses, though, this may not be applicable, especially a part-time business.  In this case, I will ask the client to estimate how much of the phone use is business vs personal, then apply that ratio to the phone cost.  It's "reasonable."

Mileage is a special case.  Use a mileage log, either written on a phone app and only deduct business miles. 

2. If you have a W-2 job, and have enough taxes withheld, you don't have to worry about making quarterly estimated tax payments.  If you are self employed, then you need to estimate your quarterly income and make a tax payment.

 

3. Business income and expenses are reported on Sch C for a sole proprietor.  This income/loss flows into your 1040.  Depending on where you live, you may or may not have a state tax obligation (franchise tax, sales tax, etc).

4.  QB profit and loss statement.

Good luck,

Mark Wagner CPA

View solution in original post

Highlighted
Level 7

Tax preperation for small business owners.

@CTTS53017, I'm glad you found @mcwagner's suggestions helpful!

Highlighted
Level 2

Tax preperation for small business owners.

Here is an article regarding your first business tax return I wrote some time ago that is still online and updated this year

https://www.thebalancesmb.com/your-first-business-tax-return-1200763

Highlighted
Level 7

Tax preperation for small business owners.

A good reference is publication 334 from the IRS.

 

https://www.irs.gov/pub/irs-pdf/p334.pdf

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