If you’re self-employed or own a small business, you’ll need to file taxes just as you would in any other line of work. The July 15th deadline still applies to you, but you’ll find yourself filling out different forms than you would as a full- or part-time employee at an organization. In many cases, owners will still want to work with a business accounting professional to ensure they’re filing taxes correctly. Yet, here are a few steps owners of single-member LLCs and sole proprietors can follow to get ready first.

What to Know About Small Business Tax Filing

1. Add Up Business Expenses 

To satisfy Schedule C, a form for single-member LLCs and sole proprietors, you’ll need to add up your business expenses, some of which could be tax-deductible. This should include inventory costs, travel expenses, equipment, and any other assets tied to your business, such as a home office space.

Not all of these expenses are calculated in the same way; for instance, vehicles and equipment are calculated with a formula specifically for depreciation deductions.

2. Calculate Your Earnings

Schedule C will also require you to calculate your business’s net income. This figure takes your business’s gross (total) income and deducts the cost of goods sold, operational expenses, and taxes.

It also adjusts for tax credits you may receive, as well as half of what you’ll owe in self-employment taxes. Projecting these figures can get tricky, which is where a business accounting professional can help.   

3. Pay Self-Employment Taxes    

Like other professionals, owners of small companies must pay into social security and Medicare. The difference is that they do so through self-employment taxes. The form for calculating the amount of self-employment taxes owed is called Schedule SE.

Filling this form out is a required step for completing Schedule C, as the amount owed will appear on Line 57 of that form. A business accounting professional can help you calculate this figure. 

While these steps may seem simple on the surface, small business owners often discover there are many more detailed aspects of completing Schedules C and SE that require the expertise of business accounting professionals. If you are self-employed or own a small business in St. Charles County or St. Louis County, Missouri, Grayson Accounting offers solutions to help manage your bookkeeping. Find out more online or call (636) 233-7875 for a free initial consultation.