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2020 has created unique challenges for small businesses across the country. Many are still struggling through this complex situation as we begin the New Year. New Year’s resolutions are important now more than ever in order to achieve the most important goals for your business. Setting appropriate goals for your business is vital to its success. Taking the necessary steps to reach these goals is easier said than done.
7 Tips On Preparing Your Business For The
New Year
Clean house: A new calendar is a great reason to purge the junk off of your desk. Go through your files and e-mails; archive what you no longer need immediately at hand, deal with the things that need attention, and get rid of the rest. This tip makes the following six tips much easier.
Review your year: Look at your numbers (revenue, profit margins, etc..), trends, and lessons learned. Document everything. Avoid having to re-learn the lessons by tracking evidence of what works, what doesn’t, and why. An impeccable record of your history is the best way to prepare for your future.
Review your customers: Who did you love, who did you want to strangle, and who did you actually fire? Review revenue and profit margins by client and update your target market profile as necessary
Get your taxes records in order: If you have hired staff or subcontractor(s) in 2020, regardless of your tax schedule, every person you employ or contract needs their paperwork. By law, that paperwork must be postmarked by January 31st, contact your accountant or bookkeeper now to make sure you’re prepared when April 15 rolls around! (It’s right around the corner).
Get informed: If you are a new business owner research on how you are going to file, tax credit laws for small businesses, or if there is anything new going to impact your business. Avoid the penalties, and be compliant before you have to be. Contact your HR attorney, CPA, and your business accountant to get informed of any changes that will affect your business.
Review your goals: Now that you have dotted your I's and crossed your T's, start the fun stuff. What do you want your business to achieve next year? Be SMART, set goals rather than make resolutions. Especially in business, there is a difference between a goal and a resolution. Resolutions are things you keep, goals are things you attain. For example - You resolve to increase charitable giving. Your goal is to donate $10,000 to the local job training center by the end of next year. Nearly all successful business owners use SMART (Specific, Measurable, Attainable, Relevant, and Time-Based) goals to achieve their goals.
Build your strategy with your team, mentors, or business coach: Once you have goals for your business, it’s crucial to get your team is on board. Schedule a planning and strategy meeting with your employees, colleagues, and support system to create the plans you need to reach those goals.
Interview with The Experts
Tax season is here and why not start the year out with a Tax expert. Join Beverly Francois in January as she interviews Bruce Wilson the owner of The Shield Financial Group, LLC. Mr. Wilson will provide in-dept. information on things Small Business, Non-Profit, and Entrepreneurs should know when filing taxes. He will also be providing tips on how to financial plan for future business growth. Date & Time is TBT.
For more on The Shield Financial Group, LLC. visit their website https://www.theshieldfinancial.com/
Income Tax Guide
Small Business Tax Forms, Rates, and Filing Information
Small businesses calculate their business profit or loss for income taxes, then include this information on their personal tax returns. This guide is for small businesses filing their tax returns on Schedule C with their personal returns (Form 1040). It includes sole proprietors and single-member LLC, owners. If your business is a corporation or S corporation, check out the Complete Guide for Corporations and S Corporations, If your business is a multiple-owner LLC or a partnership, here is a Guide for Business Taxes for Partnerships.
As a small business owner, you may be able to get a new Qualified Business Income deduction of 20% off certain business income, in addition to normal business deductions. The deduction can be taken starting in 2019, through 2025.
Because small businesses file their business tax returns with their personal returns, the due date is the same as the personal income tax return due date: April 15. If the due date falls on a holiday or weekend, the next business day is the due date for that year.
Schedule C Income Tax Forms
Here are the forms you will need for or sole proprietors and single-member LLCs, including the forms needed for calculating self-employment tax:
Tax Details Needed to Complete Schedule C.
The information you may need to complete Schedule C:
Information on costs for buying business assets like vehicles and equipment, to calculate depreciation deductions
Information on the business use of your home, for a home business space deduction
Information to calculate cost of goods sold, if you have an inventory of products or parts for sale
Information to prove all business tax deductions, including information on the costs of business travel, driving expenses, and business meals (entertainment expenses are no longer deductible)
Self-Employment Taxes Small business owners must pay self-employment taxes (Social Security/Medicare taxes) on the net income (profit) from their businesses. If you don't have any income from the business during the year, or your income is $400 or less for the year, you don't have to pay self-employment tax. A simplified explanation of how self-employment tax is calculated:
Enter your business net income
Multiply this income by 92.35% (0.9235)
Multiply this number by 15.3% (the self-employment tax rate) to get your self-employment tax liability amount.
This amount is used to determine your eligibility for Social Security/Medicare benefits for the year. If you don't have any income, you can't get credit for these benefits that year. You can deduct one-half of the self-employment tax to reduce your adjusted gross income for the year. A tax software program or tax preparer can calculate this tax for you, or you can run the calculation yourself using Schedule SE. How to Add Schedule C to Your Personal Tax Return -Add your business net income on Schedule C (Line 31) to your personal income tax return on Schedule 1, line 3 (Business Income/Loss). This schedule is used to total additional income and adjustments and bring them into your Form 1040 or 1040-SR. -Enter your total self-employment tax from Schedule SE on Schedule 2 of Form 1040 (Additional Taxes). The deduction for one-half of the self-employment tax is entered on Schedule 1.
-Add any tax credits or other business adjustments you are qualified to receive to Schedule 1, including the deduction for half of the self-employment tax. How to File Your Tax Return, Including Schedule C and Schedule SE You can file your tax return by mail or you can e-file the return. The last page of the instructions for Form 1040 lists the addresses to use for mailing your tax return to the IRS. If you are using tax software, the e-filing fee will be included in your cost. If you are using a tax preparer, this cost is also included. Filing an Application for an Extension on Your Taxes You may apply for an automatic extension of time to file your taxes, including your small business taxes. The extension is for six months for non-corporate tax returns, so the due date for the return is October 15 (unless October 15 is a weekend or holiday, in which case the due date is the next business day). **Your extension doesn't include an extension for payment. You must pay your taxes by the tax due date to avoid penalties and interest.
Filing an Amended Tax Return If you make a mistake on your tax return, whether the error is due to your business or personal taxes, you must file an amended return. The form to amend your tax return depends on your business type. To amend your personal return, including Schedule C, use Form 1040X-Amended Return. Paying Estimated Taxes If you don't pay enough taxes during the year, you must pay estimated taxes. Many small business owners must pay estimated taxes because they don't earn a salary, so no taxes are withheld from their income or self-employment. Estimated taxes are due quarterly: April 15, July 15, October 15, of the current year and January 15 of the following year. Do I Need a Tax Preparer? A very simple small business with no cost of goods sold or assets to be depreciated might be able to use a tax software program, but most small businesses need a tax preparer. Even a simple Schedule C might be more difficult than you think. Before you enlist the help of a CPA, Enrolled Agent, or another qualified tax preparer to prepare your business taxes, use the information in this guide to help you get ready for business taxes. You can also enlist the help of The Shield Financial Group, LLC. by visiting their website https://www.theshieldfinancial.com/
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