Guidance For Filing Your First Business Tax Return

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Guidance For Filing Your First Business Tax Return
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• Tax filing time can be nerve wracking, whether
  its your first time or your twentieth, but with
  this simple guidance, filing for the first time
  should be made a little easier
• Be sure to fully review the form
• Take a good look at the business tax return
  youll be needing to file, and check to see which
  areas youll need to fill in with amounts and be
  certain that you can answer every question that
  it asks of you. They might be as simple as what
  is the nature of your business, or is it your
  first year in business, but no matter what they
  ask, you must fill in the answers. Anything
  omitted from your return could result in a delay.

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• Preparing a return on a cash or accrual basis
• When filing under the cash basis, your businesses
  income will be acknowledged when it has been
  collected, and expenses are recognised when they
  have been paid. If using the accrual method,
  income is recognised when it is earned, and
  expenses are recognized when they have been
  incurred. It is widely accepted that lenders
  prefer to see financial statements based upon the
  accrual method, but tax returns can still be
  prepared using the cash method, while the
  financial statements may use the accrual method.
• While changes to your methods are permitted, once
  you have chosen whether to use cash or accrual,
  that must be your method throughout the existence
  of your business.

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• Which depreciation method should you use?
• Permitted by the IRS is a first-year deduction of
  up to 100,000 for most furniture and equipment,
  rather than the cost being written off over five
  or seven years. This usually means that most
  business owners would choose to take the first
  year write off, however, a business that has not
  made a profit are not permitted to deduct the
  first-year depreciation, whilst they may carry it
  forward to years that may prove profitable.

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• Dont forget about the home office deduction
• If you are the sole proprietor of a business and
  you run it from home, then you should look in to
  whether you can deduct a portion of your
  residence as a business deduction. This area of
  tax law is widely contested though, and youll
  have to prove that the area used in your home for
  running your business is exclusively used for
  that purpose.
• Non-employee compensation
• Independent contractors that were paid will be
  reviewed to see if the government need to be
  informed of their non-employee compensation.

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• Employees receive a W-2 form that identifies
  their income and withholding tax, and contractors
  would receive form 1099-MISC a copy of which the
  federal and state governments would also receive.
• To get the desired information, ensure that all
  contractors complete a W-9 form.
• Expenses for your vehicle
• Maintaining an auto log is always a good idea and
  will help when filing for expenses incurred while
  using the vehicle for business related purposes.

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• Self-employment tax
• Self-employment taxes such as social security and
  healthcare that may make up a significant part of
  a profitable sole proprietors total tax bill,
  are often overlooked, so ensure that these are
  calculated as part of a total estimate of taxes
  when paying quarterly estimates.
• This list of guidance is of course not
  exhaustive, and for more detailed advice when
  preparing to file your first tax return, be sure
  to seek advice from a qualified and experienced
  tax professional.

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• At Heyer Associates, we proactively assist our
  individual and small business clients in meeting
  their goals. Our key area of focus is ensuring
  that our clients remain compliant with federal
  and state tax laws by providing them with high
  quality accounting and tax preparation service
  Coral Gables. If you are looking for tax
  preparation service in Miami, Heyer Associates
  would be a right option.