The fear and frustration of owing taxes keeps business owners from filing their return. If you run a cash based business and lack good accounting systems it may be difficult to track income and expenses. During the year the last thing you may be considering is how much to set aside for income taxes. As a result, you ignore tax filing and the possibility of owing taxes. Here are five reasons to consider filing a tax return for your business.
1. Retirement Savings
In order to save for retirement you must know how much money you’re making in business. This not only requires good money management but tax strategies, as well. A component of funding your retirement includes credits to your social security account. When you’re self-employed, the payments that you make for Self-Employment tax are reported when you file your tax return. No return, no credit.
2. Business Opportunities
There are instances where tax returns are a requirement to business growth. If you are considering applying for certain business certifications, loans, or grants, for example, you will need proof of running a legitimate company. Certifications can open doors of opportunity to larger contracts and more income. However, one requirement of most applications is a filed income tax return.
3. Refundable Credits
A common tax myth that business owners have involves reporting zero income or net losses. However, you may be surprised at the tax benefits even when there is little or no profit to report. The Earned Income Credit, for example, is a refundable credit that can put between $457 to $5,666 in your pocket. If you qualify, the refund is extra money that you can use to grow your business or take a much-needed vacation. The choice is up to you.
4. Easy to Do
There are many options that make it convenient to file a tax return. Some choices include Do-It-Yourself tax software, electronic filing, and paid tax preparers who will prepare the return for you. Each of these are designed to take you through the process with ease.
5. Your Responsibility
Aside from the benefits above, another important reason to file is tax compliance. As a person earning taxable income you are responsible for filing a timely income tax return each year. Failure to do so can lead to late filing fines, penalties, and possible time in prison.
Now that you know why you should file, visit http://www.tbsusa.com and download my free audio to learn how to slash taxes and keep more of the money you make in business.