Owning a business is the dream of many people. It’s certainly not easy, however, especially when it comes to preparing a business tax return for the first time. The guide below explains a few steps you can take to ensure you’re ready when the April 15^th deadline finally arrives. 

What Should I Do to Prepare My Business for Tax Time? 

1. Consider Making Estimated Quarterly Tax Payments

Unlike personal taxes, which are paid once a year, business owners have the option of making quarterly payments to reduce their tax burden. To do so, you’ll need to estimate your business’s income for the quarter and pay taxes on that amount.

If you overestimate, you’ll receive a refund, and if you underestimate, you’ll need to pay the difference when tax time rolls around. Estimated quarterly payments can also spare you from paying the penalty, which is sometimes assessed when businesses pay the entire year’s taxes in one lump sum. 

2. Start Organizing Financial Records Now

Even if you’re diligent about record keeping all year long, don’t delay organizing your financials and business tax return information. This is especially important when it comes to deductions, as you must have the proper backing information to prove a deduction valid.

You can deduct for business meals, travel expenses, costs for building a home office, expenses for entertaining associates or clients, and charitable donations, among many others. 

3. Research Applicable Tax Credits

While deductions are certainly valuable, credits can reduce your tax bill exponentially since they are deducted from the taxes you owe and not your taxable income. You must ensure that you qualify for credit before claiming eligibility, which will prevent you from being audited down the line.

Credits can be applied to the purchase of energy-efficient equipment, research and development, hiring veterans, and paying for employee health insurance.