San Juan Island Business Tax Preparation

Am I Required to File a San Juan Island Business Tax Return? 

Simply put, yes. San Juan Island businesses are considered residents of Washington state. This subjects you to both Washington and Federal tax return filing requirements. The due date of your business return depends on your structure. For example, sole proprietorships and single-member LLCs must file Schedule C of the 1040 by April 15.

Other business structures, like a Partnership, Multi-Member LLC, and S Corporation, will file an annual business return by March 15. C Corporations follow the individual return due date of April 15. However, there can be other state and Federal tax return due dates throughout the year if you need to make quarterly estimates or file specific information returns.

These deadlines can quickly approach after year-end. After all, you might have dozens of other tasks going on, such as growing your business or hiring employees. Outsourcing your business tax preparation to an expert ensures accuracy and timely filings, leaving you to worry about more important aspects of your business.

What Tax Preparation Services for San Juan Businesses are Available?

What comes to mind when you think of tax preparation services? The most common answer is the filing of the annual tax return. What if I told you that tax preparation experts offer other services in conjunction with annual filings? San Juan Island tax preparers can cover all areas of tax compliance. Let’s go through some of the services offered.

Tax Planning and Projections

Tax planning and projections are some of the most important services that business tax preparation companies offer. Your tax expert will take your income to date and project it through the end of the year, pinpointing strategies you can implement to reduce your taxable income.

For example, maybe you find that you have more income than you originally planned, so you purchase a piece of equipment you’ve been needing to take special depreciation options. This lowers your taxable income and gives you access to a new resource to grow your San Juan Island business. Other planning strategies a tax professional can help you with include changing accounting methods, deferring income and expenses, and taking exclusive credits and deductions.

Tax planning after year-end is not as effective, as you can’t go back and change your decisions or alter your accounting records. This makes it important to reach out to a preparation expert before the end of the year to see your options and how you can save money on your next return.

1099 and W-2 Reporting

Part of tax compliance includes issuing 1099s and W-2s by January 31 of each year. Unless you outsource your payroll or have a dedicated in-house payroll team, the burden will fall on you to get these forms out by the deadline. Tax preparation for businesses on the San Juan Islands can include putting together these forms on your behalf.

This can help you avoid penalties of up to $300 per late form. In addition, professional tax preparers have the expertise to differentiate between employees and independent contractors, so you can rest assured you are issuing the proper forms.

Bookkeeping Clean Up

Staying on top of reconciliations throughout the year isn’t always easy for business owners. Before you know it, months go by, and you haven’t touched your accounting records. Many San Juan Island business tax preparers can assist you with cleaning up your accounting records, leading to complete and accurate information on your tax return.

You don’t want to pass off inaccurate records to your tax preparer. This can potentially result in an increase in your tax liability. From forgotten expenses to mistakes, you want to be sure your accounting records are clean and precise, which a business tax preparation expert can assist with.  

Preparation and Filing of Annual Tax Returns

Preparing and filing your annual tax returns is one of the most common business tax preparation services offered to San Juan Island businesses. This includes filing your return by the March 15 or April 15 deadline or requesting an automatic six-month extension. Working with the right tax preparer certifies that you are taking all qualifying deductions and credits, helping you lower your tax bill.

Correspondence with the IRS and Other Agencies

IRS audits and inquiries do happen. Tax preparation services for San Juan businesses include correspondence with the IRS and other agencies on your behalf. Most tax preparers stand behind their filings, which is why they are willing to represent you and provide supporting information when an IRS or Washington state letter is received.

Why is Professional Help Important?

Utilizing a professional for your San Juan Island business tax preparation is important for a variety of reasons, including:

Professional Advice

When you have a tax question, Google isn’t always the most reliable source, especially as tax laws can change each year. Working with a business tax expert that is familiar with the San Juan Island business landscape is indispensable. You can receive quality advice tailored to your situation, taking the guesswork out of decision making.

Additionally, business decisions happen quickly. Building a relationship with the right business tax preparer allows you to make informed decisions at a moment’s notice. Maybe you are interested in knowing how adding a new product or service impacts your tax situation or the consequences of selling an asset at a loss. Whatever the case, professional advice is important for a San Juan Island business owner.

Accurate Filings

The IRS and other state agencies utilize technology when checking the accuracy of submitted tax returns. Just one line that doesn’t add up can flag your return for an agent review. Submitting accurate filings relies on having professional help. After all, you probably don’t know the ins and outs of the tax code like a qualified tax preparer does.

Timely Tax Filings

Just like accurate filings are essential, timely remittances are also important. Going just one day past the deadline can be detrimental, with a minimum penalty of $100. Even though you can request an automatic six-month extension, you still need to pay the estimated tax due by the original deadline to avoid fines, penalties, and interest.

A business tax preparation expert can project your estimated tax due and file your returns by the deadline, allowing you to avoid stiff fines and penalties for noncompliance. Not to mention that filing a return late can put you on the IRS’s watch list and increase your chance of receiving a letter or audit request in future years.

Tax Saving Opportunities

Most business owners can agree that overpaying on taxes is never fun. The average small business pays around 20% in taxes. Wouldn’t it be nice to pay less? Tax preparation services for San Juan businesses by a professional can uncover special deductions and credits you can use to lower your tax bill.

In addition, a San Juan Island tax accountant can review your accounting records and check for alternative ways to save money. Do you have a personal car that you use for business purposes? How about having a home office? Partnering with an expert allows you to maximize your tax savings through non-traditional channels.

Freed Up Time

Taxes take time. From ensuring your books are complete to preparing the return, trying to complete your own tax returns can be time intensive and complex. Using a tax preparation service for San Juan businesses frees up time in your busy schedule. You no longer need to worry about if you took all qualifying deductions or if your returns were filed on time.

By passing this burden off to an expert, you have more time to focus on what truly matters, whether that be spending more time with your family or finding new ways to grow your business. Your time is valuable. You don’t want to be spending it stuck behind your computer looking up the tax law.

Getting Started

Does it sound like your business can benefit from professional help with your San Juan Island business taxes? If so, now is the time to get started. You don’t want to procrastinate when it comes to your taxes. Reach out to one of our team members today to start the onboarding process and start taking advantage of the benefits of outsourcing your business tax preparation.

Sources

• https://business.nextdoor.com/en-us/small-business/resources/blog/how-are-small-business-taxes-calculated#:~:text=The%20average%20tax%20rate%20for,income%2C%20expenses%2C%20and%20deductions.
• https://www.irs.gov/payments/failure-to-file-penalty