Be sure you are using the correct return for your type of business:
- If you are a sole proprietor or a single-member limited liability company (LLC), you will use Schedule C of your personal tax return (form 1040) to report your business income taxes.
- If you are a partnership or a multi-member LLC, you will file a Partnership return (1065) and report partner/member share of profits/losses on Schedule K-1.
- If you own a corporation, you file taxes on Form 1120 - U.S. Corporation Income Tax Return.
- If you are a Sub-chapter S Corporation, you will file corporate taxes on Form 1120-S. and report shareholder portion of profit/loss on Form K-1.
Be sure to check for tax changes before you complete your return. Tax changes in 2013 include:
- Changes in the business mileage rates for 2013 business driving
- Increase in the maximum amount of income (including self-employment income)subject to Social Security tax; the 2013 maximum Social Security taxable income is $113,700.
- You should also be aware of changes in accelerated depreciation on purchase of assets in 2013, including section 179 and bonus depreciation allowances.
- And check to see if your business is eligible for tax credits, like the Work Opportunity Tax Credit or the Small Business Health Care Tax Credit.
In particular, pay attention to Business Startup Costs
You may be eligible to deduct some of your business startup costs up to $5,000 and organizational costs up to $5,000 (for expenses after October 22, 2004). If your startup or organizational costs exceeded $50,000, your deduction may be limited.
Filing online (or E-filing) saves you time, it's painless, the IRS says it's 99% accurate, and it speeds any return you will receive. You can use the federal E-File service through a tax preparer or through tax software.
Large corporations must file their corporate tax returns electronically. Here is the IRS requirement:
Corporations that have assets of $10 million or more and file at least 250 returns annually are required to electronically file their Forms 1120 and 1120S for tax years ending on or after December 31, 2006.
To file electronically, you will need to use one the IRS-approved E-File Providers. Choose a provider and follow the directions on their website. The IRS also has several payment options (debit or credit card and other), depending upon the form you are filing.
- Hobby businesses
- Hiring your children
- Paying reasonable salaries
- Home business deductions
- Records to support business deductions.
Check for errors before you hit that "send" button or you put your return in the mail. Errors and omissions can delay your return and cause your return to be rejected. Common errors include:
- Incorrect or missing social security numbers or employer ID numbers
- Incorrect tax entered based on taxable income and filing status
- Computation errors in figuring the taxable income, withholding and estimated tax payments, and common credits and deductions
- Withholding and estimated tax payments entered on the wrong line, and
- Math Errors. Both addition and subtraction.