Steps That People Should Follow in Order to File Their Business Returns Successfully
Experts estimate the corporate tax for the financial year 2020 to reach 6 million which is only possible when all business owners come out to file their taxes every tax season. Research shows that most people do not like the idea of filing their taxes considering that they think that the process is so complicated and challenging to them. There is no need to keep holding on the though like most people when it comes to filing taxes and in the end fall into trouble as it is often the case. This article is meant to help anyone planning to file their business taxes soon to encounter little or no challenges as well as pressure during the entire process and have the least hectic process at the end of the day by doing everything timely and right as well.
The first step is for people that go out to file their business taxes as sole proprietors and sole proprietorship refers to the simplest business structure under which can operate their business in the modern business world. Since the business is simple with just one owner and manager, filing its returns is also simple as well. This business structure only requires the owner to file the tax based income and they are good to go as there are no any kind of taxes to be paid on behalf of the company. While paying income tax, the business owner must remember that even though they have to pay income, self-employment tax always comes first and it entails not just Medicare but also social security taxes as well. Sole proprietorship requires the business owner to pay their taxes after every three months and also file their returns accordingly as well which explains why taking their time to familiarize with the approximated tax is essential. It is the same technique that most business owners use to pay to pay Medicare and social security as well as their employees’ income tax and the most reliable way of determining how much one needs to pay in self-employment taxes is using the form1040-ES which deals with estimated tax for individuals. Anyone filing for annual tax under sole proprietorship also has the freedom to choose between using Schedule C-EZ and Schedule C which are both forms used to report the profits and losses made by a business entity.
There are also different guides for different kinds of business owners that people should familiarize with and use as well. Anyone that has filed their taxes under corporations, for instance, understands that they have to choose between S and C corporations which fortunately have an equal tax burden at the end of the day.