3 Things You Need to Get Together for Your Business Taxes
Posted on: 2 August 2021
With business taxes, there are so many things that you need to keep track of. To make tax time easier, you will want to ensure that you are keeping track of all of your finances throughout the year.
Goods Sold Cost
If you produce or sell merchandise, you need to keep track of track of the total cost of your inventory. You need to know how much inventory you started the year with. You need to keep track of your inventory cost throughout the year. If you remove inventory for personal reasons, you need to keep track of that. You need to know what your total inventory in dollar amounts is at the end of the year.
You need to know what you spent on your inventory as you will need to deduct your inventory from the money you make.
Income
As a business, you need to track your income. Your income can be tricky to calculate, which is why you will want to keep close track of it. You are going to need to know your gross receipts from your sales and services for the year. You also need to keep track of all returns and allowances that you incur throughout the year. You need to keep track of your sales records throughout the year.
Don't forget about other smaller sources of income, such as the interest that is incurred on your business checking and savings accounts. You also need to track any additional income, such as rental income, that your business makes throughout the year.
Expenses
You are going to need to track your expenses. This is a very big category to track and is something that you are probably going to want to break down into subcategories. Expenses are all items that you can potentially deduct from your income, along with the cost of your inventory, to bring down the income that you actually have to pay taxes on.
There are so many expenses that you need to track. First, you will want to keep track of all the money you spend on advertising. Then, you are going to want to track labor expenses that you pay to employees, subcontractors, and independent contractors. You need to track all local transportation and travel away from home that has to do with business.
You need to track any business insurance, phone fees, internet expenses, rent, and utilities. You also need to track all office supplies and professional fees or classes. Additionally, you need to track any depreciation of assets.
As a business owner, you need to track your income, product costs, and expenses. You will want to track of specific things throughout the year in order to keep up with quarterly tax payments, so when your taxes are due, things will be easy to sort out. If you still need help, keep these tips in mind when looking for business tax return preparation services.
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