Small Business Top Tax Questions

Basic Tax Questions That Small Business Owners Should Ask

How should I keep my records? What kind of records should I keep and how long?

One of the most important things in small business accounting is to keep good records. Good financial records help you calculate income and expenses, monitor financial status, and file tax returns. You may consider using business accounting software such as Intuit QuickBooks, Peachtree Complete Accounting, Microsoft Office Accounting Professional or Simply Accounting Premium. The IRS recommends that you keep your records at least four years.

What expenses can I deduct and how much?
A business expense is an ordinary and necessary expense to carry on a business or trade. Click here to read more about common business expenses.

I work from home. Can I deduct the cost of home office? If I can, how much?
Yes, you can, but remember the IRS is very careful about how much you deduct your home office expenses and the rules change frequently. Read more about deductions of your home office expenses.

Do I need a tax ID number, EIN?
An Employer Identification Number, EIN identifies a business entity as a taxpayer. A sole proprietor without any employees or a LLC with a single member(owner) does not need an EIN. They can use their social security number, SSN as their taxpayer identification number.
Click here for more information about EIN for single member LLC.
Read more about EIN.

What is estimated tax and how often should I pay?
The US tax system requires you to pay taxes as you earn income. Most people who are employed follow this rule by having some of their wages withheld by their employer. But, when you are self-employed, you need to pay estimated taxes yourself every three months. The due dates are April 15th, June 15th, September 15th and January 15th. Read more about estimated taxes.

No Comments

Leave a comment