Why Should Your Tax Return Be Reviewed
As a business owner, it’s essential to file accurate tax returns to ensure you don’t overpay or underpay your taxes. Preparing your business tax return can be a daunting task, especially if you’re not well-versed in tax laws and regulations.
That’s where professional business tax services can really help you.
Benefits Of Reviewing Your Tax Return
Even if you feel confident in your tax filing abilities, having a tax professional review your return can save you money. They can identify deductions and credits that you may have overlooked and ensure that your return is free from errors and in compliance with tax laws.
It’s an investment in the financial health of your business and can potentially save you money in the long run, not to mention saving you thousands in potential penalties.
Getting Started - Types Of Forms
So, where do we start? When your tax return is being reviewed, the first thing to check is that you’re using the correct form to file your return.
Different types of businesses require different forms. For example, partnerships need to file Form 1065, while corporations have the option of filing either Form 1120 or Form 1120S. Working with a tax professional can determine which form is the right one and complete it for you, giving you peace of mind that you’re not starting off on the wrong foot.
Deductions And Credits
Next up, let’s talk about deductions. They’re a great way to help you legitimately lower your tax bill, but only if you’re claiming them correctly.
A tax preparer can review all of your deductions to make sure they’re actually allowed by the IRS. Plus, they can help you spot deductions or credits that you might have missed. They can also find non-taxable items that you might be including inadvertently, which can actually increase your tax liability.
This is more to do with tax planning than tax filing but while you’re thinking about tax, it’s worth noting that different business structures have different tax implications.
While your tax return is being reviewed, make sure to check with your accountant whether you have the right structure. It’s possible that you should be operating under a more tax efficient option.
Is A Review Of A Tax Return Required?
No, a review of a tax return is not required by law. However, it is recommended that your tax return is reviewed by a tax professional for accuracy and to ensure that you are not overpaying or underpaying your taxes.
Do Potential Investors Require a Review of a Tax Return?
In some cases, potential investors may request proof that your tax returns have been reviewed by a tax professional as part of their due diligence process. This is to assess the financial health and legitimacy of the company or individual.
What Taxes Affect Businesses in Texas?
There are several taxes that can affect businesses in Texas. Here are some of the main ones to be aware of:
- Franchise Tax: This is a tax on businesses that is based on your taxable margin, which is calculated by subtracting certain deductions from your total revenue. The tax rate is determined based on the size of your business and can vary from year to year.
- Sales Tax: Texas has a state sales tax of 6.25%, but local jurisdictions can also add their own sales tax, which can range from 0.125% to 2%. As a business owner, you are required to collect and remit sales tax on taxable sales made in Texas.
- Property Tax: If you have a business that owns real property or personal property in Texas, it may be subject to property taxes. The amount of tax owed is based on the value of the property and the tax rate set by the local jurisdiction.
- Payroll Taxes: Texas does not have a state income tax, but as an employer you are still required to withhold federal income tax, Social Security tax, and Medicare tax you’re your employees’ paychecks.
- Unemployment Tax: As an employer in Texas, you are required to pay state unemployment tax, which helps fund unemployment benefits for eligible workers who lose their jobs.
More Posts For You
So, you’ve taken the plunge and started your own business. You’ve hustled to make those purchases, and worked even harder to log those sales, and
Running a business comes with its fair share of challenges, and one common hurdle that many businesses face is the complex nature of financial management.