Filing taxes is never fun, but this year poses challenges that make it particularly difficult — especially for small businesses. Many can benefit from the following tips:
#1: Consider an extension.
If you filed this can remove the time pressure of getting the forms out within the next few weeks.
However, it is important to note that although an extension gives you more time to send in your forms, it does not give you more time to actually pay your taxes. The IRS still expects payment, so small businesses are wise to pay their estimated taxes on time to reduce the risk of any penalties.
#2: Claim the employee-retention credit.
Those who have yet to claim this tax credit and qualify can still do so. The program that was started to help businesses during the pandemic went through many changes. As a result those who may not have qualified initially may now meet the requirements. This can result in a $7,000 credit per employee.
The program ended Oct 1, 2021, but employers can still use it retroactively.
#3: Review income.
The IRS counts a lot of things as income, including loans. This can make filing taxes and making sure you claim income correctly a bit tedious. Thankfully, the IRS does not expect business to claim funds received from the Paycheck Protection Program or other pandemic related federal programs as income on federal forms.