How to File Your Small Business Tax Return

Posted February 17, 2022
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There’s no way around it. If you’re a business owner in the United States, you are required to file a tax return each year. Of course it’s tempting to put off tax prep until right before the deadline, but setting aside a few hours now will save you time and headaches down the road—especially if your business tax needs are on the complicated side.

To help get you started, here’s a list of everything you need to do before you file. 

  1. Gather small business records
  2. Choose the right tax form for your business structure
  3. Make note of important tax deadlines
  4. Choose the right filing method for your small business

1. Gather small business records

Gathering and organizing business records is the first step when filing a business tax return. Some of this information is personal, so the IRS can confirm your identity, but much of it is related to the finances of your business. 

Here are the documents you’ll need when filing your taxes:

Personal identification information

Your Taxpayer Identification Number (Employer Identification Number or Social Security Number) and your tax return from the previous year.

Financial records relating to your business

Financial statements like a balance sheet and income statement, 1099 forms you have received or sent, and the amount you’ve paid in estimated tax payments during the year.

Supporting documentation

These documents generally fall into two categories: earnings and expenses. Records that show your earnings can include:

  • Invoices you’ve sent to clients
  • Customer sales records
  • Cash register tape
  • Anything else that shows money coming into your business

Documents that show your expenses can include:

  • Rent receipts for your small business
  • Receipts for office supplies and equipment
  • Payroll records
  • Anything else that shows money coming out of your business

If you use a bookkeeping platform like Bench, you’ve already been keeping your books updated throughout the year so collecting these documents won’t take much time at all. Before tax time, your dedicated team can assemble a comprehensive Year End Financial Package with everything you need to file an annual tax return.

2. Choose the right tax form for your business structure

Filing the appropriate tax form for your business entity will help you avoid costly mistakes. How do you know which tax forms you need to file? Here are the most common business structures and the forms they require.

3. Make note of important tax deadlines

Once you know which forms to fill out, you’ll need to know how to fill them out correctly and keep an eye on when they are due. 

Filing Deadline: March 15 or April 15, 2022

S corporations: An S Corp needs to file its own tax return. At the same time, the shareholders of this business entity need to report their share of profit or loss with a Schedule K-1 on their personal taxes. Tax Filing Deadline: March 15, 2022

Partnerships or LLCs with multiple members: If you are part of a partnership or a multiple member LLC, you should get a copy of Schedule K-1 at tax time—either from your accountant or the person responsible filing your Form 1065. Don’t forget that the IRS will only accept your personal tax return (Form 1040) with a Schedule K-1 attached. Tax Filing Deadline: April 15, 2022

Filing for both of these business structures is more complex than filing as a sole proprietor, so it’s a good idea to get expert tax filing support if you can.

Filing Deadline: April 18, 2022

April 18, 2022 might be an easy date to remember, as it’s the same deadline your personal tax return is due.

Sole proprietorship or LLCs with one member: The IRS considers business income from sole proprietorship entities the same as personal income, so filing for this business structure is relatively simple. If you’re paying $1,000 or more in income taxes, you’ll also be required to file estimated taxes. 

C corporations or LLCs that elect to be corporations: Corporate income tax rate is a flat 21% for tax years beginning after December 31, 2017. On top of this, you are required to pay personal income taxes separately from your corporate taxes.

Tax extensions and late payments

Depending on the type of business you own, you can request a six-month filing extension by submitting Form 4868 on or before:

  • Partnerships deadline: March 15, 2022. Deadline with extension: September 15, 2022.
  • S corporations deadline: March 15, 2022. Deadline with extension: September 15, 2022.
  • C corporations deadline: April 18, 2022. Deadline with extension: October 17, 2022. If the fiscal year end is different from the calendar year end, then the filing due date is on the 15th day of the 4th month after the fiscal year end. The extended deadline would be 6 months after this date.

Just remember that extensions give you more time to file your tax return—not more time to pay it. If your payment is past due, you’re looking at paying an extra 0.5% of unpaid taxes every month until you pay your original tax bill, up to a maximum 25% of your total tax bill.

Other notable dates

If your small business has paid $600 or more to a contractor or professional, do not wait until March or April to start your taxes. You’ll need to file a 1099-MISC which must be ordered from the IRS and filed by January 31, 2022.

If you’re self-employed, the deadlines for estimated quarterly tax payments are: 

  • April 18, 2022
  • June 15, 2022
  • September 15, 2022
  • January 17, 2023

If you’re worried about which forms you need to submit, or whether you’re missing out on any sizable tax deductions, it may be time to call in the professionals. Having tax experts in your corner can give you the peace of mind that everything will be filed accurately and on time and save you hours of stress in the run up to tax deadlines. 

With a premium subscription from Bench, you can get your federal and state taxes filed effortlessly. Plus, your dedicated tax team has the knowledge and expertise to help minimize your tax bill by making sure you receive every deduction and tax credit available to you.

Get Bench’s premium tax subscription package before February 15, 2022 to take the guesswork out of filing your annual business tax return.

4. Choose the right filing method for your small business

While you can fill out your tax forms by hand and mail them to the IRS, it’s simpler and more secure to file your taxes online through the IRS’s e-File system. Bonus: you’ll get your return back faster and any tax refund will be electronically deposited into your online bank account. 

You have three main options when filing your federal taxes online:

1: File with Free File

Free File is an IRS program designed for business owners who made $72,000 or less during the year. Sign up with one of 9 Free File providers to prepare and file your return at no cost. They offer guided tax preparation with online calculations, and they’ll automatically send a copy of your tax return to the IRS for you. 

We recommend double checking the instructions from whichever Free File service you choose. If your filing needs are complex, you may have to add on paid features.

2: File with Free File Fillable Forms

Free File Fillable Forms are electronic forms you fill out and file yourself. You qualify for this option if your business made over $72,000 during the year. You’ll need to create a Free File Fillable Forms account with the IRS and fill out the relevant forms for your business. 

While they offer basic calculations and some guidance, they won’t catch errors for you. Double and triple check your tax forms before submitting.

Options like Free File and Free File Fillable Forms may be cost effective but they have their limits. For example, if you need to file state taxes or back taxes, Free File Fillable Forms is not an option.

3: Find an online tax pro to prep and file for you

For more complex businesses, the easiest and most pain-free tax filing method is handing your taxes over to a professional. Bench handles all your business bookkeeping and tax filing in one place to fully streamline your finances before tax time. 

Plus, Bench provides additional services that free tax filing programs can’t, including:

  • Customized tax support: Have rental income? Need to file back taxes? Your Bench team knows exactly which tax forms you need and which deductions to claim for your small business.
  • No additional cost for state tax filing: File your federal and state income taxes for one flat fee.
  • Quarterly estimated taxes handled: Your dedicated team fills out every remittance form for your quarterly taxes, and lets you know how much to pay and when.
  • Year-round tax filing support: Get on-demand and unlimited consultations with our in-house tax advisory professionals and research team.
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