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2024 Tax Prep For Small Business Owners

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With only a few months to 2024, now’s the perfect time to prepare for the new tax season. 

November 16, 2023
Author: NCH

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There’s no denying that taxes can be complicated, given legislation changes that can happen in the new year. This is why business owners like you should understand the latest tax codes. 

If you want to start your 2024 on the right foot, we’re here to help. In this blog, we’ll help you create an efficient tax prep strategy for your small business

How to Prep For The 2024 Tax Season

Since 2023 is almost ending, here’s how you can prepare your small business for the upcoming 2024 tax season:

Check For Changes

It’s rare for two tax seasons to be the same. Most of the time, every season brings new changes to our tax codes, from rate fluctuations to deductions. 

So, before you start filling out your forms, look for any significant tax changes that could affect your filings. 

Start Organizing Your Records

Organizing your records is another important step you need to do before you file your taxes. Some of the documents you need to have on hand before the 2023 tax season starts include:

  • Income statements
  • Expense receipts
  • Payroll records
  • Bank statements
  • Mileage records
  • Estimated tax payments
  • Balance sheets
  • Profit and loss statements

This step minimizes the chances of potential errors in your forms and allows you to review the overall financial health of your business.

Analyze Your Financial Statements

Once you have all your financial statements, start analyzing each and check if they’re accurate. One small error in your records could significantly affect your tax filings. 

If you use a spreadsheet or a program like QuickBooks to organize your business transactions, we suggest you calculate your income and expenses to check if your records are correct. 

List Your Tax Deductions

Knowing what deductions you can make in your tax filings will help you reduce your liabilities. 

There are several write-offs you can use on your filings, like:

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  • Qualified Business Income (QBI) Deduction: This deduction allows small businesses to deduct up to 20% of their qualified business income on their taxes. Single filers must earn a total taxable income of $182,100, and $364,200 for joint filers to qualify for the deductions. If your profit exceeds the two limits, the IRS will decide if you can get a full or partial deduction.
  • Charitable Deductions: You can deduct any charitable donations you’ve made from your filings. Depending on your business structure, you can claim this deduction in two ways. If your business is set up as a sole proprietorship, partnership, or LLC, you can deduct it from your personal taxes. However, you can deduct donations from your corporate taxes if you have an S corporation.
  • Business Interest: If you’ve taken out a loan for your small business or established a credit line, you can deduct the interest you pay. This write-off has a 30% deductible limit. So, if your income is around $100,00 and you paid $60,000, you can deduct $30,000 from your taxes.
  • Retirement: As self-employed, you will be responsible for your retirement plan. Any contributions to your retirement plan can be deducted from your tax filings, granted that the IRS deems them tax-qualified. 

Create Your Tax Calendar

A tax calendar will help you track when your payments are due and when your filing deadlines are. Below are the key dates you need to remember for the 2024 tax season:

  • January 31, 2024: Deadline to submit your employee’s W-2 and your independent contractor’s 1099-NEC.
  • March 15, 2024: Deadline for submitting business tax returns for partnerships, S corporations, and LLCs taxed as partnerships. If your tax year did not start on January 1, follow the IRS fiscal year due date.
  • Deadline to file Form 2553 for changing business elections. 
  • April 15, 2024: Deadline for submitting tax returns for C corporations, sole proprietorships, single-member LLCs, and other LLCs taxed as corporations. 
  • Last day for contributions to traditional and Roth IRAs.
  • September 15, 2024: Deadline for partnerships or S corporations that requested an extension for submission. 
  • October 15, 2024: Deadline for sole proprietorships, multi-member LLCs, and corporations that requested an extension for submission. 

Aside from this, here are the deadlines for the 2025 quarterly estimated tax payments:

  • April 15, 2024: Deadline for Q1 estimated tax payments.
  • June 15, 2024: Deadline for Q2 estimated tax payments. 
  • September 15, 2024: Deadline for Q3 estimated tax payments. 
  • January 15, 2025: Deadline for Q4 estimated tax payments. 

Gather Your Forms

Now that you have a tax calendar, start gathering all the tax forms you have to submit. Here are some of the most common forms you’ll need to file: 

  • Form 1040: U.S. Individual Income Tax
  • Form W-2: Wage & Tax Statement
  • Form W-4: Employee’s Withholding Certificate.
  • Form W-4P: Withholding Certificate for Pension or Annuity Payments.
  • Form 1099-MISC: Miscellaneous Income
  • Form 1099-G: Certain Government Payments.
  • Form 1099-K: Payment Card & Third-Party Network Transactions.
  • Form 1099-DIV: Dividends & Distributions.

Check Your Information

Accuracy is one of the best ways to avoid errors in your tax filings. So, before you submit your forms, review your information carefully. Verify if your personal information and calculations are correct. 

Although the IRS allows you to dispute certain mistakes on your filings, correcting them takes time. You could forget about the error, which could result in fines and penalties later. 

Plan Ahead With A Tax Professional

It’s never too early to start your small business tax prep. Think about how you can improve your strategies this coming 2024. If you need more help filing your taxes, look no further than NCH. 

NCH is one of Nevada’s leading business formation service providers. Aside from helping entrepreneurs kick-start their businesses, we also offer tax planning services. 

Our tax experts are here to assist you in preparing your small business for the upcoming tax season. We’ll ensure you make the most of available deductions and credits. With our help, you no longer have to worry about missing deadlines or making errors in your filing. 

Don’t wait until the last minute; get ahead of your taxes and secure your financial future with NCH. To learn more about our services, visit our website here.

DISCLAIMER: The above material has been prepared for informational purposes only, containing opinions of the provider, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consider consulting tax, legal, and accounting advisors before engaging in any transaction.

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