Taxes are stressful for individuals, and business taxes are no easier. Many business owners are stressed when tax time rolls around, but if you practice good financial hygiene throughout the year, business taxes are not so bad. Let’s talk about how to do taxes as a business in Colorado.
First, it’s important to know your tax filing deadlines. Depending on the type of business you have, your deadline may be different. For example, the deadline for corporations is usually in April, while sole proprietors usually have until May. Additionally, quarterly tax payments and payroll taxes must also be taken into consideration.
Once you know the deadlines you are working within, it is time to assemble your financial records. Before you even start doing your taxes, you should put together all of your financial records, including payroll documents, income statements, depreciation schedules, credit card statements, and large purchase receipts.
Finally, it’s time to start doing your tax forms. In addition to your personal 1040, you may also have to file a schedule C, a form 1120 or 1120S, and a schedule K-1. Schedule K-1 reports are usually filed alongside form 1065.
Another thing to consider when it comes to your business taxes is all of your hustle-side income. Every dollar you earn is taxable, even if a new endeavor only makes $600 a month. The IRS considers these small businesses, and you will have to pay an income tax and self-employment tax.
Many people get stressed at the thought of doing their taxes, and it is easy to understand why. Even though there is hardly a penalty for doing your taxes incorrectly, the stress of having to redo them can deter anyone from starting. If your business taxes are straightforward and simple, you can likely do them independently. However, if they are complicated or you are exhausted by the thought of doing them yourself, you can get assistance. The experts at Aspen Commercial Lending can help you organize and file your business taxes.