Preparing for Taxes in your Business

By Jeanette Bednar, Jarvis Management, LLC

Closely-held business owners know that it is tax season and time to organize all their

information for their 2021 tax returns. Below are some suggestions for the business owner to

consider in preparing his or her company taxes.

1. Complete 1099s. You have to provide Forms 1099, or information returns to vendors.

2. Extensions. You can generally extend the filing date for your business tax return for six

months, though any taxes owed must be paid on the due date.

3. Stay organized and keep good books and records. By keeping accurate books

throughout the year, you ensure that your business is running smoothly, your bank

accounts balance and your tax return will be correct. If bookkeeping is inaccurate, out of

date or non-existent, you are at risk of an adverse audit, and could be missing out on

valuable tax deductions. Tracking the business’ income and expenses and having the

right bookkeeper or bookkeeping service is key.

4. Work with your CPA during the year. You should work with your accountant

throughout the year, not just at tax time, to track income and spending, to make sure you

are managing cash flow, and also to monitor your profits.

5. Separate business from personal expenses. The best practice here is to use separate

bank accounts and credit cards for personal and business, and only run business expenses

through the business.

6. Payroll. Confirm that your payroll has been completed correctly, including all tax and

other state filings.

7. State and local filings; other compliance. Be sure you file your annual report with the

Secretary of State. Also do not forget about state and local tax filing requirements, which

should be filed on time to avoid interest and penalties.

8. Timing. Another good practice? Do not wait until the last minute to get your taxes

complete.

9. Budgeting and payment. You should budget and plan for estimated income tax

payments during the current year and any taxes due with your returns. Reserving funds

over the course of the year for taxes is a prudent practice.