Well, April 15 is almost here, and the tax-related panic is thick. If you haven’t filed your 2018 tax paperwork and are rushing to get your taxes in by the deadline, we’ve decided to give you some last-minute tax advice that will hopefully help ease your stress.
Confirm Necessary Paperwork
The rush for the deadline may cause you to forget the paperwork you need to complete your business taxes. While you can find a list of business tax forms on the IRS website, here are some key documents.
If you have an S corporation, you’ll file the Form 1120S for the corporation’s income taxes and a Schedule K-1 for reporting each shareholder’s net earnings. For payroll, use the Form 940 to submit your FUTA payroll tax return and Form 941. If you have employees or contractors, report employee wages on Form W-2 and payments to contractors on Form 1099.
For C corporations, you’ll submit the Form 1120 for the corporate taxes and Form 940 for payroll taxes.
Limited Liability Corporations (LLCs)
Due to its hybrid nature, the tax forms for an LLC are determined by the number of members and its resulting classification as either a disregarded entity, partnership, or a corporation. If your LLC is classified as a disregarded entity, you’ll submit the Form 1040 along with a Schedule C or C-EZ, Schedule E, or Schedule F. For partnership LLCs, you’ll submit the standard Form 1065. If you’ve elected to be classified as either an S corporation or C corporation, you’ll file the Form 11020S or Form 1120 respectively.
Tax Help: Human Or Software?
Tax software can be helpful and more convenient during tax season, especially if you are just now starting to look for tax help. If you don’t already have a trustworthy tax preparer in mind, feel free to check out the directory of certified professional tax preparers available on the IRS website.
Use Your HSA Or IRA
If you have a traditional IRA account or HSA account, you can make contributions until April 15, lowering your gross income on your taxes. For traditional IRA accounts, the maximum amounts are $5,500 (for people under 50 years old) and $6,500 (for people 50 years or older). If you have an HSA account, you can set aside $3,450 for single plans or $6,900 for family coverage plans.
Don’t Forget About The Qualified Business Deduction
If you are a sole proprietorship, partnership, or an S corporation, you can deduct 20 percent of your business’ income from your taxes, provided your income is not above $157,500 (for single filers) or $315,000 (for married taxpayers filing jointly). If your income is above these thresholds, the deduction is still available but will begin to phase out.
Consider Extending Your Filing Deadline
If you don’t think you’ll have your tax paperwork together in time for an April 15 filing, you can request a six-month filing extension. You’ll use the Form 7004 to request a free tax filing extension. It’s worth noting that the extension only applies to tax filing deadlines, not tax payments. Opting for an extension means that you’ll need to estimate your taxes and pay by April 15 to avoid being penalized for paying late.
The main benefit of extending your deadline is to prevent any careless or rush-related mistakes. Frantically rushing to meet the April 15 deadline may cause you to forget important paperwork or make miscalculations that will increase your chances of an audit. By extending your filing deadline, you’ll give yourself some extra time to gather all the necessary paperwork and prevent rush-related mistakes.