How to File Business Taxes Online: A Complete Guide

About 76% of taxpayers in America filed taxes online in 2020. There are a lot of benefits to doing so.

You don’t have to worry about your return getting lost in the mail. You get your tax refund a lot faster thanks to direct deposit.

The IRS actually encourages people to file online. That includes business owners, too.

If you have a business and you’re wondering how to file business taxes online, then keep reading. This article takes the mystery out of filing business taxes online.

1. Survey Online Tax Filing Options

There are dozens of ways to file business taxes online. You can go through one of the Free File options through the IRS.

This lets tax filers who earn less than $72,000 a year file online. You can also use software programs such as TaxAct, TurboTax, or H&R Block.

You could also work with a CPA and let them handle tax filing online for you. There are accounting firms that you can work with or find a service that’s inexpensive and simplifies filing taxes for you, such as www.taxfyle.com/small-business-tax-filing.

It’s always best to get help with filing business taxes from a tax professional. They have the expertise to help you maximize your tax obligations.

They’ll help you calculate deductions and make sure that you have everything in place to file an accurate tax return.

2. Get Tax Filing Documents

Get all of your business and personal tax documents together. You’ll need documents that back up your income and business expenses for the year.

There are other forms you’ll get from lenders, health insurance programs, investments, and banks. For instance, Form 1095-A is from the Health Insurance Marketplace. A 1099-MISC shows how much money you earned for business services.

Form 1098-E is for the amount of interest paid on student loans, and Form 1098 is for mortgage interest paid.

All providers must send these forms to you and the IRS by January 31. If you don’t have certain forms by the first or second week of February, contact the provider so you can get your business taxes filed.

You’re likely to file your business and personal taxes together, no matter what the business legal structure is.

3. Calculate Income

This is actually the simplest step in the tax filing process. Tally up the amount of income received throughout the year.

Keep in mind that the IRS considers just about all money received as income. For instance, if you had a debt charged off for more than $600, that gets reported to the IRS as income.

You need to report this on your taxes as well.

4. Take Business Deductions

This is the fun part because this is how you lower your tax bill. What are the deductions you can take?

Business-related expenses include advertising, office supplies, training, business travel, membership fees, computer equipment, website hosting, insurance, and business licenses.

Business expenses vary by industry, too. A work from home consultant would write off things like home office expenses.

A personal trainer would write off fitness equipment and studio space.

Make sure you have receipts for all of your deductions. If you plan to deduct a meal or coffee as a business expense, be sure to keep the receipt and note who you were with.

5. File Taxes

Filing business taxes and personal taxes can get a little complicated. Hopefully, your software or tax preparer walked you through the steps to get your taxes ready to file.

This is a good time to double-check your numbers and verify that you didn’t miss anything on your taxes. Go over all of the forms that will get filed with your business taxes.

If you use a tax preparer, ask them any questions that you have about your return. Then make sure it’s accurate and ready for submission.

The tax preparer submits your taxes online on your behalf. You’ll get a notification from the IRS saying that the return was received. You’ll get another that indicates the return was accepted and ready for processing.

If you DIY the return and use software, you’ll submit your taxes through the software program. You’ll get similar email notifications from the IRS regarding the return and acceptance of your return.

6. Prepare for Estimated Taxes

Businesses have to pay estimated taxes for the next tax year. The first quarter’s payment is due on Tax Day. You might find yourself in a financial bind if you have a large tax bill and an estimated tax payment on top of that.

The best thing you can do is prepare for estimated taxes. File your taxes as early as you can so you know how much you owe.

Ideally, you’d set aside a portion of your revenue and keep it in a separate account for tax purposes throughout the year. If you didn’t plan ahead, there are ways to take care of your tax payment and estimated taxes.

You can pay what you can and go on a payment plan with the IRS to get caught up. You could put your tax payments on a credit card, but bear in mind the interest is steep.

Moving forward, your estimated tax payments should be your total tax obligation divided by four. Check your profit and loss statements throughout the year and adjust your tax payments.

For instance, if your revenue increased during the year, you should submit more for estimated taxes.

Learn How to File Business Taxes Online

Technology does make filing taxes easier. You can and should file your taxes online. You’ll get your taxes done faster and you’ll have an accurate tax return.

Learning how to file business taxes online is easy, especially when you have help. Enlist the assistance of a CPA to get help with your business taxes. You won’t miss a deduction.