Your Small Business Tax Prep FAQs, Answered
If you run a small business, taxes are going to be a primary concern for you all year round. Handling your taxes isn’t easy, and there are a lot of places where a small business can go wrong when paying taxes.
Keep reading to get answers to a few of your top small business tax preparation questions from the experienced McAllen CPA, Abigail Y. Murray.
How Much Can a Small Business Make Before Having to File Taxes?
If you run a small enough business, you may not have to file taxes. Generally, small business owners will need to file taxes for their business if they made a net income of $400 or more from that business. This means you can subtract your deductions from your income amount, and if that figure is $400 or higher, then you will need to file a business tax return.
How Often Do Small Businesses File Taxes?
For most people, tax day only comes once a year, but if you own a small business, you won’t be so lucky. Small businesses and self-employed taxpayers have to file what is known as estimated quarterly taxes. This means that small businesses actually pay taxes four times per year.
The amount paid is figured based on an estimation of how much taxes you will owe in total for the year. That estimated amount is split into four separate tax payments. This means you’ll need to do year-round small business tax planning.
What Taxes Do Small Businesses Pay?
Most people know about income tax, but that’s far from the only type that a small business has to pay. In fact, there are six different types of taxes that small businesses interact with:
- Income tax
- Estimated tax
- Sales tax
- Employment tax
- Self-employment tax
- Excise tax
Can I Get a Tax Refund for Small Business Losses?
If your business spends more money than it brings in, then it’s operating at a loss. When you file taxes, you’re meant to be paying a portion of what you gained, meaning your tax burden will be as low as $0 if your business lost more money than it made.
Not every type of small business will qualify for a refund, but you may be able to claim your losses on your tax return to get some money back. You can also get a refund if you overpay on any of your taxes during the year.
Maximize Returns & Minimize Debts With Help From Abigail Young Murray, vCFO
Taxes are a fact of life, but you can take steps to reduce what you owe. An experienced CPA can help you find ways to bring down your tax burden and maximize any possible returns.
If you own a small business in the Rio Grande Valley, reach out to McAllen vCFO, Abigail Y. Murray, for help with your finances. We can help with everything from tax preparation to financial planning.