For any law-abiding citizen, filing taxes should be done because it's essentially how the government will ensure that you're living a comfortable life. On the other hand, a business tax must be paid by business owners because it's the government's way of making sure that the business contributes to the economy.

Filing income tax returns is a must for any business, even small ones. Small businesses should file tax returns for their business to avoid paying more tax than necessary and avoid getting fined for not filing tax returns for the previous year. Furthermore, it's relatively easier because tax rates vary depending on the type of business, giving small business owners little breathing room. Regardless, not many small business owners know how to file their taxes, so we'll guide you through this article. The steps are as follows:

Step 1: Gather All Your Financial Documents

First of all, you need to use your financial documents to gather all the necessary information to file your taxes. You should list all the essential information you need for the filing process, like your registered name, date of incorporation, business address, and business activities. For example, you should register your business with your state if you haven't yet. You can do this by visiting your state's website and filling out the necessary forms.

Additionally, you need to have all your financial records like business bank statements, canceled checks, and your cash register totals to ensure that you have calculated your taxes accurately. You should also gather documents to substantiate your business income and expenses, like contracts with your employees, bills, and receipts.

Step 2: Find the Right Forms

The second part is finding the proper federal tax forms while filing. You need to determine whether you're filing an actual form (Form 1040), Form 1040-A, or Form 1040-EZ. If you're filing a business name different from your own, you need to file Form 1040-B.

These forms are available online to download directly from the IRS website. There are also third-party websites that offer free tax filing tools, so that's another option if you're running low on cash.

Step 3: Fill Up Your Forms

And now, it's time to fill up the proper forms so that you can file your taxes. The first form is where you will key in your tax return information and your Social Security number (if you're filing a business name that's different from your own, you need to include your business tax identification number instead).

Next, you need to gather your financial documents and fill up the forms based on which kind of form you are using. The next step is to verify your entries and ensure that all your entries are correct. The last step is to print out the forms and mail them to the IRS for processing.

Step 4: Keep an Eye on Deadlines

Now that you have filed, that's not the end of it. You have to keep an eye on the deadline because penalties will be imposed if you fail to meet the deadline. Moreover, there are different deadlines for different kinds of businesses. You need to pay your taxes on time to don't have to pay penalties.

What Happens If I Miss the Deadline?

If you fail to file your taxes on time, there is a penalty that the IRS commonly imposes called the failure-to-file penalty, and you will be required to pay a fine. Depending on the situation, you might be required to pay $210 or $275. Although this penalty is reasonable, you should still avoid getting fined.

The good news is that you can always ask for an extension. It's a pretty simple process because you just need to request an extension using Form 4868, and you can get a six-month extension.

Conclusion

Although filing taxes is a challenge, especially if you're running a small business, it's still a must because it's essentially the government's way of ensuring that your business is living up to its responsibilities. You have to ensure that you're filing your taxes by the deadline, or you’ll suffer penalties from the government.

Tottax provides business tax filing services available for any business owner. Our professional tax experts will ensure that your taxes are filed correctly and on time, all for affordable prices. Simply go to our website to learn more!