Avoid These Mistakes If You’re A Small Business Owner

small business

Whenever tax time comes around, being a small business owner can be stressful.

You have to keep track of tax deadlines, distribute your employees’ income statements, and complete your business and personal tax return all at once.

With that in mind, you may slip up and make a few tax errors. Here are some common mistakes and how to avoid them.

Underpayment of estimated tax

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The 5 Ws of a 1099-K

Don’t let your 1099-K stand in the way of business.

If you’re an Uber driver, run an Etsy shop, or rent out your home to AirBNB frequenters, then you might notice a new tax form that has found it’s way into your mailbox in recent years.

It’s nothing to stress over. This is generally a straightforward form to review, and easy to report on your tax return.

What is a 1099-K?

Form 1099-K, otherwise known as Payment Card and Third Party Network Transactions, is one of the more recently introduced tax forms. It was created by the IRS in order to report income received from online electronic payments (e.g. credit cards, PayPal, debit cards, etc.) through third party processors. Prior to this form, many independent contractors who used online payment methods were left confused on how to report those sales on their tax returns.

Who gets a 1099-K?

Wondering if you’re one of the lucky ones who will get a 1099-K this year? The qualifications are somewhat more specific compared to other forms such as the W-2. With a 1099-K, it is based on sales volume.

Retailers who accept online credit card payments will receive a 1099-K from any business that processed their payments. However, the 1099-K is only mandatory if online processing meets the following stipulations:

  1. Sales volume is over $600 per year via credit card companies.
  2. Sales volume is over $20,000 and more than 200 individual transactions were made via third party processors.

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Prepare a Business Tax Return with RapidTax

Let RapidTax help you and your business this year!

Starting this year, RapidTax is offering online business tax return preparation and e-filing. We’ll now be able to further assist existing customers who already use our website to prepare their individual returns. We’ll also be able to welcome new customers with businesses who need to file a tax return. Below are a few questions that you’ll want answered before preparing your business tax return with RapidTax.

What type of businesses can use RapidTax Business preparation?

Your business entity is determined when you register your business with the state you are located in. Our team at RapidTax welcomes four main business entities when it comes to preparing and e-filing business returns. These include the following:

  • Single Member LLCs
  • Partnerships
  • S-corporations
  • C-corporations

If you do not fall under one of these business entities or you’re unsure of what type of business you have, feel free to give our tax team a call at 844-CORPTAX (267-7829) to help you out. Continue reading “Prepare a Business Tax Return with RapidTax”