Texas Small Business Tax Checklist
Tax day is coming soon for small business owners, it is often intimidating for the busy owner to sort, account, and file the mountain of paperwork each year. Reidel Law Firm is the law firm for Texas small businesses, we are created from the ground up to support small businesses as they grow and prosper. Here is our Texas Small Business Tax Checklist to help guide you through this busy tax season.
Mark your calendars for the many tax days
Every year, one of the first things I do for my own firm and the many small businesses I counsel is to create a list or mark up a big desk calendar for the various tax days every small business will need to remember. In Texas we are rather spoiled with no personal income tax and only a nominal franchise tax for small businesses. Other states have to contend with state and federal income taxes, state and federal corporate taxes, state and federal payroll taxes and so on.
- The Texas franchise tax is due on May 15 every year. Refer to our article about the franchise tax and how it is calculated.
- Texas sales tax is due quarterly by April 20, July 20, October 20, and January 20, discounts are available for timely and early payments. Click Here for more information.
- Federal taxes for partnerships and multi-member LLCs need to be filed by March 15.
- Federal taxes for sole proprietorships and single-member LLCs need to be filed by April 15, same as individual income taxes since it is a pass-through tax entity.
- Federal estimated taxes, which are required for sole proprietors, partners, and S corporation shareholders who expect to owe more than $1,000 in taxes ($500 or more for corporations) for income which is not subject to withholding. These are due quarterly by April 15, June 15, September 15, and January 15. Read more about estimated taxes Here.
Keep your records for at least 7 years
In order to claim deductions properly and avoid any unnecessary audits it is advised that businesses should keep records for at least he period that amendments are allowed to your filings. The longest duration for amendments are 7 years.
Learn about and properly withhold federal employee taxes
Federal income tax withholding (FIT), Social Security Tax (FICA), Federal Unemployment Tax (FUTA) each must be paid either semi-weekly or monthly while reporting quarterly. Click Here for the IRS resource guide for small businesses.
Know Your Deductions
There are many wide ranging tax deductions available to the Texas small business owner. Most small businesses do not take advantage of them because they just don’t know. Here is a short list of the most common tax deductions that may apply to you.
- Inventory – The cost of goods sold for businesses that sell or manufacture products.
- Employees’ Pay – You can deduct the amount given to your employees for compensation.
- Employee Benefits – Benefits like health plans, educational assistance, and life insurance are generally deductible.
- Pension Plans – Contributions to an employee’s qualified plan.
- Auto Mileage and Maintenance – The standard mileage rate or the actual expenses may be used for deductions.
- Utilities – Water, power, trash, and telephone bills at the office are 100% deductible as regular business expenses.
- Home Office – Rent, mortgage, insurance, electricity, housekeeping, security, maintenance, and regular business supplies can be deductible for your home office.
- Travel Expenses – Business travel is 100% deductible, including airfare, hotels, and other on-the-road expenses.
- Education – Any seminars, trade shows, magazines, books, DVDs that are related to your business or industry are all 100% deductible.
- Entertaining – Any meals with a client or prospective client is deductible, but is has to be within a business setting or take place before or after a business meeting.
- Advertising and Marketing – The cost of ordinary advertising (business cards, ads, website costs, google Adwords) and even promotion costs for publicity.
- Service Fees – Fees for credit card processing and other business services are 100% deductible.
- Office Supplies and Equipment – Supplies adds up, deduct it.
- Professional Fees – Yes, your attorney and accountant fees are deductible!
- Licenses and Taxes – Licenses, fees permits, and even taxes paid may be deductible.
Keep your Texas small business checklist handy this year as your business grows and prospers. Remember to document those deductions and earn back those credits. Be sure to call Reidel Law Firm today for your free consultation, use the form below or call (832) 510-3292.