How Entrepreneurs can Make Their Tax Preparation Easy

Preparing taxes is a complex job for any type of self-employed person. Entrepreneurs who are new to the business world often need help with their taxes. They might be an expert in their field but, with taxes, they need the help of a tax professional. Also, ensuring the tax compliance of a business requires in-depth knowledge of tax laws. Most entrepreneurs partner with an expert accountant in tax preparation for entrepreneurs to make their taxes easy.

An expert Certified Public Accountant can prepare and report taxes for your business. Other than tax preparation, your accountant can help you with tax guidance, tax planning, and bookkeeping. If you are hiring employees, you need to fulfill their tax obligations as well.

If you are looking for a reliable partner to manage your company’s taxes, get in touch with Agro Accounting CPA. It is a leading accounting firm that provides accounting services for artists, freelancers, and entrepreneurs. Also, the company complies with the time-honored ethics of the CPA profession!

Tax Preparation Guide for Artists: Understand the Difference Between Self-Employed and Small Business Tax Categories

 Artists make a decent amount of money in the U.S. They have multiple sources of income, such as from shows, exhibitions, stage performances, and personal invites. Like everyone else in the country, they have to register themselves as some sort of business identity and to pay taxes. And when it comes to taxes, there are two categories: salaried and self-employed.

Now, within the self-employed category, there are multiple sub-categories. A small business is considered self-employed in the eyes of the IRS, as is a freelancer and corporation owner. Then what is the difference between the categories of self-employed and small business? Let's find out in this tax preparation guide for artists.

Difference Between Self-employed and Small Business

When someone says they are self-employed, they are most likely referring to themselves as a freelancer, an individual artist, or a sole business owner. On the other hand, when someone says they run a small business, they are likely referring to a business that hires employees. Both are considered self-employed, but a small business also employs other people. With that comes the obligation of collecting income taxes, paying the employer share of self-employment taxes, offering sick and vacation pay, carrying workers' compensation insurance, and so on.

How to Register Your Self-employed Status with Your State

When you work as a self-employed person, you need to choose a business structure in order to register your business with the state. Then, you get a tax ID number and file for the appropriate licenses and permits. You can register your self-employed status in four primary ways:

●        Sole proprietorship

●        Partnership

●        LLC

●        Corporation

These are the most common types of business structures. If you are working as a single, self-employed individual, a sole proprietorship is the best option for you. On the other hand, if you are planning to hire employees or have a business partner, it is best to register as a partnership or LLC.

A sole proprietorship does not provide any protection of personal assets against legal claims and debts. In certain partnerships, you are protected against your partner's debts, but you do not have personal asset protection against claims. However, LLCs and corporations offer you personal asset protection.

You need to get an Employee Identification Number, EIN, if you hire employees. You can partner with income tax services for the self-employed to apply for business licenses, an EIN, and more.

Essential Things You Should Know About the 2022 Tax Season

Filing an income tax return is an annual chore, and you can’t avoid it. Whether it’s a federal income tax return or a state or local return, you should start preparing for taxes as soon as possible. Along with it, consider hiring super tax services and stay updated on tax laws to reduce your tax season stress. Read this blog post to learn some important things about the 2022 tax season that can make your tax filing smoother!

● Income Tax Return Deadline - The federal income tax return deadline for individuals and C corporations is April 18, 2022. So, these taxpayers must file their 2021 income tax returns by this date to avoid late-filing penalties. The deadline for partnerships and S corporations is March 15, 2022.

● Pre-Pandemic Rules – Congress suspended various tax rules through 2020 because of the global pandemic. Now, everything is back to pre-pandemic rules. Taxpayers should be mindful of such new developments when filing in 2022. It is best to speak with a tax professional to ensure that your taxes are correctly filed.

● Extension for Business Taxes – If you cannot meet the filing deadline and want more time to file your return, file an extension. Taxpayers can obtain a six-month filing extension without providing a reason for the request. Individuals can use IRS Form 4868 and entities can use IRS Form 7004 to request a filing extension.

We hope this post helps you understand these basic things about the 2022 tax season. Even if you hire a tax preparation guide for the self-employed, a taxpayer should always know about changes in the tax law and about new IRS guidance. It can help avoid costly mistakes. Moreover, you can always consult with Agro Accounting CPA to handle the complexities of filing your taxes.