Do you have a business in Los Angeles or Orange County? If so, filing your business tax can be quite tricky. However, with some helpful tips, filing business taxes doesn’t have to be the worst thing in the world. This article provides five easy tips to help you out with filing.
1. Collect your records
It’s essential to have your financial records on hand before filing season. These documents include your company’s financial statements and receipts for any products or services you have sold or paid for. These records will be used to verify your tax filing, so you should prepare them ahead of time.
2. Get help from professionals
Keep in mind that filing business taxes is entirely different than filing individual taxes. As such, you should hire a professional to file your tax return. A professional will know what to look for when filing business tax and will be able to answer any questions that come up throughout the filing process. In addition, having someone else handle your filing helps relieve tax-time stress and allows you to focus more on your business.
3. Determine your federal tax obligations
There are four types of business tax collected by the US government:
- Income tax – This is the tax levied on net business income.
- Employment taxes – This includes unemployment insurance, social security, and Medicare taxes withheld from an employee’s paycheck.
- Self-employment tax – This is the self-employed equivalent of employment taxes. It includes Social Security and Medicare.
- Excise tax – This refers to any federal or state-imposed fee on specific products such as alcohol, tobacco, gasoline, and firearms.
Determining your federal tax obligations is a must for two main reasons. One, it allows you to compute your taxes accurately. And two, it ferrets out hidden tax deductions which can lower your business’s tax liability.
4. Determine your state tax obligations
Your business is also subject to state and local taxes. You can find out what your tax obligations are by checking with the California Franchise Tax Board.
The tax filing process in California is more complicated than the federal process. As such, if you’re filing your business return by yourself, you should familiarize yourself with the filing requirements and the forms you need to file. It can become quite overwhelming to figure out how much money each state expects from businesses, so hiring a filing professional is recommended.
5. Mind your deadlines
All businesses in Los Angeles and Orange County must file at least two times per year. The first filing is due April 15th, while the second filing is due October 15th. If any tax remains unpaid after these dates, you will be subject to penalties. If these dates fall on a weekend or holiday, they are moved to the next business day.
As a business owner in Los Angeles and Orange County, filing your taxes can be an overwhelming process. But it doesn’t have to be stressful with the right tools and some helpful tips. We highly recommend collecting all your financial records before filing season to calculate your tax liability accurately. Also, consider hiring a professional to help ease any stress you might have throughout the filing process.