Small Business Income Tax Preparation | Delinquent Business Tax Returns

Antioch CA | Brentwood CA | Oakley CA | Pittsburg CA

Click Here to Call and Schedule a Free Consultation 415-738-8331

At GAMARRA, CPA we provide income tax preparation for the small business owner - whether self employed and no employees or limited liability company (LLC) taxed as either sole-proprietor or S-Corporation. Our services include

  • Federal and State Income Tax Returns 

  • 1099-Misc processing for Contractors

  • Preparation of Depreciation Schedules

  • Tax Preparation for Delinquent Business Tax Returns | Prior Year Business Income Tax Returns

  • Tax Preparation of Sole-proprietors, Limited Liability Company, S-Corporation, and C-Corporations

  • Applying for Employer Identification Number (EIN)

  • Non Profit Tax Returns including Churches Unrelated Business Income Tax Returns (990-T)

Our clients some pose questions that are helpful for others. As such, below we have listed the most commonly asked questions among our clients.

Question: I registered a company with Legal Zoom and do I need to file a separate tax return?

Answer: In most cases, you will need to file a separate tax return unless you registered a LLC taxed as a sole-proprietorship. If you elected to be taxed as a partnership, corporation, or LLC taxed as an S-Corporation then you will be required to file a separate tax return. You may receive a K-1 for your activity resulting from the business which will impact your personal income tax return. Ensure to file the Form 8832 if you elect another form of taxation for your LLC.

Question: I registered a corporation and now I am wanting to terminate it - do I need to file a tax return?

Answer: Yes, if you filed with the State Corporation Commission then you will need to file a final tax return.

Question: How do I figure and pay taxes for my self employment income? 

Answer: Generally, most small businesses will prepare a profit and loss statement every quarter to assess their net income. The rule of thumb is to pay at least 30% of net income every quarter for estimated taxes. The 30% includes self employment taxes (i.e., social security, medicare, and income tax). Mail your estimated taxes with an ES-1040 coupon for each quarter. This needs to completed for the State in which you reside as well. 

Question: I received a letter from the IRS that specifies that I filed the wrong tax returns? 

Answer: Starting a business can be challenging in the first year. Most tax payers register and file a limited liability company (LLC) as a sole member. However, due to a lack of experience, they assume that they are a corporation, partnership, or S Corporation and file as such. This creates an erroneous filing with the Internal Revenue Service and requires amending the original tax return. Furthermore, if penalties and interest for filing an inaccurate tax return is assessed, you can request to have it waived depending on the facts and circumstances. 

Question: I am a contractor 1099-MISC and have not filed for several years? 

Answer: If you received a 1099-MISC then you are required to report the income in your personal tax return and will be subject to social security tax, Federal income tax, and State income tax. Quarterly, you should be estimating your income taxes to avoid paying penalties for underestimating your income taxes - both Federal and Sate. 

Tips to Make Small Business Tax Preparation Easier

Owning a small business does not mean that you need to be a tax expert. As long as you are ready for tax time, you should not be stressed. Good tax preparation means that you have everything ready to go. Having delinquent taxes from not being able to file your small business taxes on time is problem that could have been easily avoided. Here are some tips to make sure that you are ready for tax time.

1. Start Now

Once you have your taxes filled, you should start thinks about next year’s tax preparation and what you will need. Rushing around at the last minute trying to find all the paperwork you need for tax preparation is stressful, and can lead to delinquent taxes. Take the time to keep yourself on track, and make sure that everything that you need for next year’s tax preparation is in one area.

2. No More Shoeboxes

The shoebox method of storing documentation that is needed for tax preparation can work for individual taxes. However, small business tax preparation needs more organization to make sure that everything is filed correctly. Start recording everything that you need for tax preparation electronically.

3. Back Up Your Records

Once you have stored all your records electronically, you should have everything backed up to a remote location. The cloud is the best spot, as you can send data to other people or receive data at any location. An onsite backup is also recommended. The point is to make sure that you have a contingency plan since the IRS needs to see your records. Or you could face delinquent taxes.

4. Online Banking

Nearly all banks offer online accounts, and you are able to download all the transactions from a selected amount of time. This makes it easy for you to know all of the tax deductibles and their amounts.

5. An Accountant

While you could do your own taxes, there is a high chance that something could go wrong. Filing taxes yourself can also take a long time. An accountant can help you plan for next year’s tax preparation. As they have a huge amount of knowledge, they can provide information about all the items that you need, and what items that you do not need for tax preparation. This makes it much less stressful; as you do need wonder about if you have all the paperwork that you need for tax preparation.

When it comes to small business tax preparation working with accountant, and using the tips above, will not only make tax time less stressful. It will also give your business a competitive edge as you can get back to work faster. You also do not have to worry about delinquent taxes as you are able to fill on time and with the correct manner.