Tax filing season is here. Most founders would prefer to focus on their business rather than dive into the minutiae of tax forms and filing deadlines. Fortunately, there are a few steps you can take to get your startup’s taxes completed on time and with as little disruption to your business as possible.
Here are three tips to consider.
Get Professional Help
Seek out a qualified tax professional. Qualified tax professionals can prepare your tax returns, answer specific questions, and provide personalized advice for your situation. A qualified tax professional can help you stay on track with your filings and payments while minimizing the burden of taxes on your business.
Because the things you do now can impact the taxes you owe later, it is best to engage a tax professional early rather than wait until a return is due. If you can, find a tax professional who has experience working with startups or other businesses in your industry.
Stay Organized and Keep the Receipts
Make a plan to gather and organize your documents. Check the tax forms you’ve already filed for accuracy and put all your documents in one place. This will minimize the back-and-forth required between you and your accountant to get the job done.
Proper documentation is essential to prove your income and expenses. Keep the receipts! Ask your tax professional to recommend appropriate software for tracking your income, expenses, and, in some cases, time. Maintaining complete and accurate records now can save you time, money, and headaches in the future.
Know Your Deadlines - Some Key Dates
Most people know about the April 15, 2024 deadline for individuals to file (or request an automatic 6-month extension for filing) their 2023 U.S. federal income tax returns and pay their income taxes due for 2023.
Businesses can have different filing requirements and deadlines. If your startup is classified as a U.S. partnership or S corporation and uses a calendar tax year, file its 2023 U.S. federal income tax return, or an application for an automatic 6-month extension of the deadline for filing such return, by March 15, 2024. If your startup is classified as a U.S. C corporation and uses a calendar tax year, you should file a corporate tax income return (Form 1120), or an application for an automatic 6-month extension of the deadline for filing such return, by April 15, 2024.
Remember that your startup may have other tax compliance deadlines, including requirements under state and local law. Also keep in mind that your startup may have tax obligations throughout the year, not only during the regular tax filing season. For example, you may be required to make quarterly estimated income tax payments and remit payroll tax withholdings throughout the year. Consult your tax professional for more guidance on your particular tax compliance deadlines.
Disclaimer: This is intended only as general guidance for startups. Every taxpayer’s needs are different. Please consult your tax professional.
