|Starting a business could be very exciting. Regardless of the type and size of your future business, you must conduct your research and get professional advice before you start your business. You could learn a lot from a successful business owner. Many professionals offer free initial consultation.
You must ensure that you start with the right business entity. You should know the tax consequences of your business entity selection.
Another consideration should be the legal protection of your business income from high tax liability. If you do not plan strategically and carefully, your business income will be subject to high tax liability. You must have a good accounting system that ensures your business is ready to benefit from any unforeseen opportunity and to keep track of income and expenses.
A great accounting system ensures that your profit and loss are correctly recorded and your expenses are properly classified. When you start your business or have a current business, you incur several expenses that are treated differently for tax reporting purposes. Tangible and intangible items of expenses might require to be amortized or depreciated. You must keep track of the cost of all items and the date that you placed them in service.
Your business financial records set you apart from other business owners who do not have a good accounting system for their business. A business financial record is needed to apply for loans, grants, credits, mortgages, and to conduct other financial transactions.
Many small business owners were not qualified for the Paycheck Protection Program Loan (PPP) because of poor accounting and incorrect tax return of their business. A good accounting system is also a great protection in case of an audit.
You should keep your receipts or evidence of expenses for as long as necessary to administer the provisions of the tax code. As most receipts fade after a certain time, it is advisable that you copy and scan your receipts.
The first tax return for your business is the most important tax return. It must be legally and accurately done. Your tax filing obligation starts once you register your business with the Internal Revenue Service even if you have not actively running the business or you have no income from the business. The IRS will not know until you file. Each business requires a different tax form. Be sure to file the correct tax form.
You could be good at preparing your personal tax return and your personal budget. However, your business bookkeeping and tax return should be entrusted to a tax and accounting professional. Do it yourself would take away valuable time required to run your business and cause costly mistakes. You could miss some deductions and incorrectly recorded some expenses. It would cost you much more to get a professional to correct your mistakes.
Do not alone act on the advice of friends, family members and others who might know as much as you do. You could be in the same business as your colleagues, but your financial situation is very different. You could attend some classes, workshops, seminars, and sign up for certain subscriptions. They are tax deductible expenses.
Research the advantages and disadvantages of running your business from home as it relates to your tax filing obligations. Running an S corporation from a home office presents serious tax filing challenges.
Do you know that you could reduce your tax liability by proper tax planning strategy as individual or business owner?
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Estimated Tax Payment Dates
Fourth Quarter – Due January 15, 2021
OPPORTUNITY FOR ACCOUNTANTS AND TAX PREPARERS!
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Pierre Tax Group offers partnership agreement to provide tax representation services to clients.
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|FREE REVIEW OF PAST 3 YEARS TAX RETURN AND DISCOUNTED FEE FOR TAX RESOLUTION SERVICE!