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Category: Business Taxes

file my corporate business taxes

Q&A: What if I can’t file my corporate business taxes by my IRS tax extension deadline?

 

The IRS does not allow additional time to file taxes after a six month a tax extension deadline has been granted. However, if you requested an extension for your corporate business taxes and cannot make the October 15th deadline, you’re not off the hook! You still need to file taxes appropriately and as soon as possible.

After October 15th, the IRS does not accept e-filed taxes. You will now need to print out all your tax paperwork and mail it to the IRS. If you have a refund coming for your corporate business taxes, there is no late fee or penalty for filing late.

However, if you owe a tax payment and missed the tax extension deadline, you are subject to late fees and penalties. Penalties are calculated as percentage of the amount of taxes you owe.

The Three Penalties You Are Subject to if You Miss the Tax Extension Deadline Are:
  1. Failure to File Penalty: The failure-to-file penalty will probably be the most expensive, as it starts out at 5% for each month the tax return is not filed, up to a total penalty of 25% of your balance due. Even if you owe money and can’t pay it, you should still file to eliminate this penalty. Filing as soon as possible, even if it is after your extended tax deadline, can help keep this penalty low. If you are more than 60 days late on your extended tax deadline, this fee will be the smaller of $135 or 100% of the unpaid tax bill.
  2. Failure to Pay Penalty: If you missed your tax extension deadline, you will also be subject to a failure to pay penalty of .5% of your unpaid taxes for each month. This penalty can end up being 25% of your unpaid taxes. The good news is that if you requested an IRS tax extension for your corporate business taxes, and paid at least 90% of your tax bill by the original filing due date, you will not face a failure to pay penalty if you pay the remaining balance by your tax extension deadline.
  3. Interest: The amount of interest owed on your corporate business taxes will vary depending on your tax bill and how far past your tax extension deadline you file.

gather your documents and file as quickly as possible

You will not have to pay a failure-to-file or failure-to-pay penalty if you can show that you failed to file or pay on time because of reasonable cause and not because of willful neglect.
If you missed (or know you are going to miss) your extended tax deadline, the best thing to do is file your taxes by mail with the IRS as soon as possible to avoid increasing penalties and interest charges. If you need assistance in filing your corporate business taxes, Vyde and their virtual bookkeepers can help you gather your documents and file as quickly as possible.

Other posts that might interest you:

6 Reasons Why Filing a Tax Extension with the IRS is a Good Decision

Top 10 Things You Should Do If You File a Corporate Business Tax Extension

Q&A: How to file a corporate business income tax extension with the IRS

Q&A: Do I need to request a state tax extension if I filed an IRS tax extension?

Q&A: My 6 month extension on my corporate business taxes is due on 9/15.  Help!

Q&A: Can I file a second IRS tax deadline extension for my corporate business taxes?

Q&A: How do I file an amended tax return for my business?

Q&A: What if I missed the IRS tax extension deadline?

What if I missed the IRS tax extension deadline

Q&A: What if I missed the IRS tax extension deadline?

 

What if I missed the IRS tax extension deadline

If you filed an IRS tax extension this year, or in previous years, and missed the extended filing deadline, you need to take action as soon as possible.

Here are a few tips to consider if you missed the IRS tax extension deadline:
  • File as soon as possible. Taxes cannot just be forgotten or ignored. If you missed filing taxes, no matter the year, they still need to be filed. If you owe taxes, you’ll need to file as soon as possible to keep penalties from increasing over time. If you are due a refund, there is no penalty for filing late but filing sooner rather than later will get your refund coming sooner.
  • Pay as much as you can. If you filed an IRS tax extension, technically your tax payment was due with your tax extension request form by April 15th. However, if you didn’t make a payment by that deadline, you’ll want to pay as much as possible as soon as possible. Paying down your tax bill will minimize penalties.
  • File by mail. After the tax extension deadline, the IRS no longer accepts taxes filed electronically. However, you still have the option of printing, filling out, and mailing your tax documents if missed the deadline.

Whether you’ve missed only one year of filing taxes or several, Vyde can help you compile your tax information and file it with the IRS. The most important thing to do if you missed the IRS tax extension deadline is to file as quickly as possible.

Other posts that might interest you:

6 Reasons Why Filing a Tax Extension with the IRS is a Good Decision

Top 10 Things You Should Do If You File a Corporate Business Tax Extension

Q&A: How to file a corporate business income tax extension with the IRS

Q&A: Do I need to request a state tax extension if I filed an IRS tax extension?

Q&A: My 6 month extension on my corporate business taxes is due on 9/15.  Help!

Q&A: What if I can’t file my corporate business taxes by my IRS tax extension deadline?

Q&A: Can I file a second IRS tax deadline extension for my corporate business taxes?

Q&A: How do I file an amended tax return for my business?

amended tax return

Q&A: How do I file an amended tax return for my business?

An amended tax return offers the opportunity to make changes to an e-filed tax return that has been accepted by the IRS, OR to make changes to a paper return that has already been mailed. Making changes to a return that has not yet been mailed or accepted by the IRS is not considered an “amended tax return.” An amended tax return can be submitted for several reasons including the addition of more information, change in filing status, or change in any information included on an original tax return.

There are several types of IRS amendment tax forms for varying types of business structures. They include:

  • Form 1040X if you’re filing as a Sole Proprietor or single member LLC
  • Form 1120X if you’re filing as a Corporation
  • Form 1065 for a partnership or LLC with multiple members. You’ll need to check box G5 on the first page and then submit a statement that identifies the line number of each amended item, along with the correction for that line. You’ll also need to provide a brief explanation of the reason for changing each line.
  • If the Schedule K-1 for your partnership or LLC needs amended, you’ll need to fill out a new Schedule K-1 and check the “Amended K-1” box at the top of the page.
  • Check with your state to see how to file an amended state tax return in your area. Since tax laws vary from state to state, amended business tax returns are often filed differently and have specific instructions.

The IRS requires that an amended tax return is filed within three years of filing the return, or two years of when the tax was paid–whichever date is later. An amended tax return cannot be e-filed, but have to be sent to the IRS by mail.
Have more questions about your amended business tax returns? Vyde can help.

Other posts that might interest you:

6 Reasons Why Filing a Tax Extension with the IRS is a Good Decision

Top 10 Things You Should Do If You File a Corporate Business Tax Extension

Q&A: How to file a corporate business income tax extension with the IRS

Q&A: Do I need to request a state tax extension if I filed an IRS tax extension?

Q&A: My 6 month extension on my corporate business taxes is due on 9/15.  Help!

Q&A: What if I can’t file my corporate business taxes by my IRS tax extension deadline?

Q&A: Can I file a second IRS tax deadline extension for my corporate business taxes?

Q&A: What if I missed the IRS tax extension deadline?

6 Reasons Why Filing a Tax Extension with the IRS is a Good Decision

Why Filing a Tax Extension

There are few deadlines in the year more important than April 15th. Every adult in the nation is affected by tax day, and all can feel a little stress because of it. However, sometimes that April 15th deadline seems to come sooner than we would like it, and there’s just no way to get income taxes filed on time. That’s why the IRS offers a tax extension option to individuals and businesses who cannot meet the April 15th filing date. This gives taxpayers an additional 6 months to properly fill out and file their tax returns.

Feeling a little guilty about needing extra time on your taxes? Don’t. Millions of tax extension are filed each year.

Here are 6 reasons why filing a tax extension is a good idea:
  1. It offers the chance to do it right the first time. The IRS would rather you file your taxes accurately the first time they receive them, rather than waiting for you to make corrections and fill out an amended return. It also saves you time by making sure your information is correct when you fill out your return and not having to rush through and make simple errors.
  2. Returns that have been extended are less scrutinized than amended returns. A tax extension request doesn’t raise any red flags with the IRS, but amended returns sometimes do. The IRS will likely not be suspicious of an extended return and you are not more likely to be audited because you submitted one. However, filing a tax extension does not decrease your risk of being audited either.
  3. Extensions are easy to file. All it takes is one quick form sent to the IRS (Form 4868) and you’ve  got an extra six months to gather your paperwork and fill out your return. Keep in mind though that a tax extension doesn’t give you more time to pay your tax obligation; it only gives you more time to file your paperwork. Your tax payment is still due by April 15th.
  4. Extensions are automatic. You don’t need to wait to hear back from the IRS if you filed an extension on your personal taxes. As long as you submitted your request on or before April 15th, the extension is automatic and you will not be notified.
  5. It allows you more time to file. The most obvious and rewarding reason for filing a tax extension is that it can help you breathe easy for a while if April 15th came just a little too quickly this year. A tax extension gives you six extra months to gather important paperwork like 1099s and K-1s.
  6. You can work with a professional CPA. If you didn’t have time to squeeze in an appointment with your CPA during the official tax season, a tax extension gives you plenty of time to do so. Your CPA will likely have more time to meet with you after April 15th, and it may work better for your schedule, too. Consulting a tax professional will help you feel secure in the accuracy of your tax return.

You can work with a professional CPA

Other posts that might interest you:

Top 10 Things You Should Do If You File a Corporate Business Tax Extension

Q&A: How to file a corporate business income tax extension with the IRS

Q&A: Do I need to request a state tax extension if I filed an IRS tax extension?

Q&A: My 6 month extension on my corporate business taxes is due on 9/15.  Help!

Q&A: What if I can’t file my corporate business taxes by my IRS tax extension deadline?

Q&A: Can I file a second IRS tax deadline extension for my corporate business taxes?

Q&A: How do I file an amended tax return for my business?

Q&A: What if I missed the IRS tax extension deadline?

Q&A: Do I need to request a state tax extension if I filed an IRS tax extension?


The IRS requires you to fill out a Form 4868 to request a tax extension, but many states also have their own guidelines on requesting an extension on state taxes. Some states, like California offer automatic extensions, while many other require separate paperwork from the Form 4868.
Since almost every state in the US is different in this regard, you’ll need to check with your state’s tax authority to see what you need to do to file a state tax extension. States including Alabama, California, and Wisconsin offer automatic six month extensions without any additional forms, while New York grants extensions but they must be requested specifically. Nine states do not have a state income tax, so you don’t even have to file an income tax return in those states.
See detailed information about state extension filing deadlines and mailing addresses by selecting your state of interest from this state tax authority’s website. Many states have state-specific tax extension forms, separate from the IRS Form 4868.
Keep in mind that a tax extension with the IRS and with your state does not also mean an extension to pay any taxes you may owe. This payment is still due by the original tax deadline of April 15th. To avoid paying any penalties, calculate a quick estimate of what you might owe and submit a payment with your tax extension paperwork. Even if you overpay, you can always claim a refund in a few months when you eventually file your state tax return.
Extended state tax returns are due October 15th, which is the same IRS deadline. If you miss the extended tax deadline, you will likely be subject to penalties and interest from both sources. Have more questions on state tax extensions? Vyde can help answer them and other small business bookkeeping questions.
Other posts that might interest you:
6 Reasons Why Filing a Tax Extension with the IRS is a Good Decision
Top 10 Things You Should Do If You File a Personal Tax Extension
Q&A: How to file an individual income tax extension with the IRS
Q&A: My 6 month extension on my personal taxes is due on 10/15.  Help!
Q&A: What if I missed the IRS tax extension deadline?
Q&A: What if I can’t file my personal taxes by my IRS tax extension deadline?
Q&A: Can I file a second IRS tax deadline extension for my personal taxes?

Q&A: How to file a corporate business income tax extension with the IRS

income tax extension

The IRS allows businesses to file an income tax extension which provides additional time beyond the original deadline for filing income taxes. For most business partnerships, the original filing date is April 15th; while most corporations, including S-Corps and C-Corps have their taxes due on March 15th. A corporate business income tax extension provides an additional 5 or 6 months to file.

All businesses owners other than sole proprietors should submit an IRS Form 7004 to request an income tax extension. Since all business activities are reported on a sole proprietor’s personal tax return, they will need to submit a Form 4868 instead. You do not need to provide a reason for requesting a tax extension, but your income tax extension request must be submitted by the original due date of your taxes (March or April 15th). Business tax extensions are automatic and only rejected if there is an error in the information provided on the Form 7004, such as an incorrect tax ID number.

A corporate business income tax extension does not give you extra time to pay your taxes, it only provides additional time to fill out your tax forms. You are still expected to pay any taxes you may owe by the original due date. It is best to pay your taxes when you submit your tax extension to avoid IRS penalties and interest charges.

A business tax extension can be filed electronically or by mail, but must be filed online by midnight or postmarked by the original tax deadline.

If you filed a business income tax extension this year and need help preparing your taxes, Vyde can help.

Other posts that might interest you:

6 Reasons Why Filing a Tax Extension with the IRS is a Good Decision

Top 10 Things You Should Do If You File a Corporate Business Tax Extension

Q&A: Do I need to request a state tax extension if I filed an IRS tax extension?

Q&A: My 6 month extension on my corporate business taxes is due on 9/15.  Help!

Q&A: What if I can’t file my corporate business taxes by my IRS tax extension deadline?

Q&A: Can I file a second IRS tax deadline extension for my corporate business taxes?

Q&A: How do I file an amended tax return for my business?

Q&A: What if I missed the IRS tax extension deadline?

Corporate Business Tax

Top 10 Things You Should Do If You File a Corporate Business Tax Extension

Determine your tax payment

If you filed a corporate business tax extension this year, you now have an additional five or six months to file your taxes, depending on when your original tax deadline was. Most corporate business tax extension requests allow a business owner until October 15th file taxes with the IRS. Some tax extensions are only valid until September 15th if they  are operating based on a calendar year, rather than a fiscal year.

Assuming you’ve already sent your Form 7004 to the IRS requesting an extension, here’s what you need to do next:
  1. Determine your tax payment and submit it to the IRS before April 15th. If your business bookkeeping is up to date, you should be able to determine your payment total by multiplying your taxable income by your current tax rate.
  2. Subtract any quarterly estimated tax payments you have already made throughout the year from your tax payment. It is best to submit your tax payment and your tax extension request at the same time.
  3. Wait for an approval from the IRS. Unlike a personal tax extension request, a corporate business tax extension must be approved before proceeding. The IRS will generally approve or deny your request within 24 hours of submitting your corporate business tax extension paperwork.
  4. Check to see if you need to file a state tax extension form as well. If you don’t owe any state taxes, you do not need to file an extension form. Click here for specific instructions on filing a personal tax extension in your state. In many cases, unless you owe state taxes, your federal automatic extension can be used to extend your state return(s) as well.
  5. If you are not able to pay your entire tax bill or did not submit any taxes due by the April 15th deadline, contact the IRS about setting up a payment or installment plan.
  6. Small businesses with employees can apply for an in-Business Trust Fund Express installment agreement. Find out if you qualify here.
  7. If you haven’t already, start preparing your tax return now. If you filed a corporate business tax extension but don’t necessarily need the full five or six months, it is best to get your return completed as soon as possible.
  8. If your corporate business tax extension request happened to be rejected by the IRS, they will notify you. Your request may be rejected for various reasons including a recent name change, business type change, if you moved your office, or entered your Tax Identification Number incorrectly. You will need to make any corrections on your tax extension request and resubmit.
  9. Hire a professional. If you’re behind on your medium or small business bookkeeping and taxes, a professional accountant can help you get caught up, file your taxes by your extended deadline, and maintain current records for the tax year ahead.
  10. Submit your tax return by the September or October 15th deadline. If you plan to e-file, your return must be submitted by midnight; if you plan to mail your tax return to the IRS, it will need to be postmarked by the due date.

Filing a corporate business tax

Filing a corporate business tax extension is can be a complicated process, depending on your business entity type and the amount of tax documents you need to catch up on. If you still have questions about your personal tax extension, contact Vyde; we can help.

Other posts that might interest you:

6 Reasons Why Filing a Tax Extension with the IRS is a Good Decision

Q&A: How to file a corporate business income tax extension with the IRS

Q&A: Do I need to request a state tax extension if I filed an IRS tax extension?

Q&A: My 6 month extension on my corporate business taxes is due on 9/15.  Help!

Q&A: What if I can’t file my corporate business taxes by my IRS tax extension deadline?

Q&A: Can I file a second IRS tax deadline extension for my corporate business taxes?

Q&A: How do I file an amended tax return for my business?

Q&A: What if I missed the IRS tax extension deadline?

Q&A: My 6 month extension on my corporate business taxes is due on 9/15. Help!

Businessman and Businesswoman at Work

If you filed a 6 month tax extension with the IRS for your corporate business taxes back in April, it probably seemed like October 15th was eons away. However, that rapidly approaching October 15th deadline may have you feeling a little stressed out. If you filed a tax extension and still haven’t finished your tax return, here’s what you need to do:

  1. If you owe a tax bill to the IRS, make sure you paid it when you submitted your 6 month corporate business tax extension. If you didn’t pay your tax bill then, that is the most important thing to take care of. The sooner you make that payment to the IRS, the less penalties and interest you will have to pay.
  2. Start your return now. Don’t wait until October 14th to start on your tax return and then rush through it. Give yourself time to gather the proper documents and file your corporate business taxes accurately. Corporate business taxes can get complicated in a hurry with multiple forms to fill out; it’s best to take your time and do it right the first time so that you don’t have to worry about filing an amended return later on.
  3. E-file or send your tax return to the IRS by October 15th. The IRS does not accept e-filed tax returns after October 15th and mailed tax returns must be postmarked by this date as well.
  4. Contact a CPA. They can help you gather needed tax information, accurately fill out your tax return, and file it for you. They can even help you set up a payment or installment plan with the IRS if you cannot make your full payment right away. Vyde accountants can help you file your corporate business taxes with the IRS before the October 15th deadline. Contact an accountant with any questions you may have about your tax extension.

Other posts that might interest you:

6 Reasons Why Filing a Tax Extension with the IRS is a Good Decision

Top 10 Things You Should Do If You File a Corporate Business Tax Extension

Q&A: How to file a corporate business income tax extension with the IRS

Q&A: Do I need to request a state tax extension if I filed an IRS tax extension?

Q&A: What if I can’t file my corporate business taxes by my IRS tax extension deadline?

Q&A: Can I file a second IRS tax deadline extension for my corporate business taxes?

Q&A: How do I file an amended tax return for my business?

Q&A: What if I missed the IRS tax extension deadline?

accounting mistakes

4 Accounting Mistakes That Put Your Small Business At Risk

 

Accounting is one of those tasks that grow with your business. The bigger your business grows, the larger and more complicated accounting tasks become. Which means accounting mistakes are more prone to happen. You shouldn’t take managing a company’s finances lightly.

Many small business owners choose to tackle their own accounting and small business bookkeeping tasks and while some are able to pull it off, many are making costly accounting mistakes they don’t even know they are making.

Here are four common accounting mistakes to avoid in your small business:

Mixing business and personal finances

Mixing business and personal finances

While your business is still in its infant stage, it’s easy to use your personal bank account. Most new business owners use the same bank account and record keeping methods you’ve always used, without separating the two. However, this can be a costly mistake to small business owners. One of the first steps when starting a new business should be to open a new bank account. If you pay for business expenses out of pocket, keep your records for tax deductions and reimburse yourself. It’s the same idea as turning in receipts to your employer for a business expense. Try to keep your personal and business accounts as separate as possible.

Forgetting to record small transactions

Many small business owners don’t keep track of small expenses simply because they seem insignificant. Mailing a package, or purchasing file folders don’t seem like expenses you need to keep track of. However, it is essential that you track even the smallest of transactions, no matter how insignificant. Those small business-related purchases add up and after a while, you’ll rack up a decent amount of tax-deductible business expenses. If the IRS ever audits you, you’ll want to have records or each and every business expense. Not to mention, staying on top of the small transactions makes managing the larger business expenses that much easier.

Not setting a clear budget for each project

Failing to effectively budget even the smallest projects within your company can be a costly mistake. A project that isn’t properly budgeted can end up costing a company way more money than it should have. Simply because there is no clear plan going in. Set a budget for each project, convey that number to employees working on the project, and stick to it. Setting budgets for all projects keeps a business’ finances on track and cuts spending significantly.

Trying to manage all accounting in-house

When a business is first starting out, they have limited expenses which makes it easy to manage your own accounting. However, as your company grows, managing your own accounting could actually be costing your business money. While hiring an accountant will cost you more money each month, you’ll actually save money long-term. An accountant can help you free up your time and focus, find tax deductions you didn’t know about, and find errors that only an expert can spot. In fact, the IRS reported over $3 Billion in penalties and fees charged to business owners for mistakes in taxes and payroll in 2013.

Not setting a clear budget for each project

To speak with an accountant about saving your small business time and money, and avoiding these costly mistakes, contact Vyde today.

FAQs about Accounting Mistakes:

  1. Why is mixing business and personal finances a mistake?

    Combining finances can lead to confusion, hinder tax deductions, and complicate financial tracking. Separate accounts streamline record-keeping.

  2. Why should small transactions be recorded?

    Small expenses accumulate and impact financial records. Proper documentation ensures accurate tax reporting and facilitates financial management.

  3. Why is setting a clear budget for each project important?

    Clear project budgets prevent overspending, enhance cost control, and promote financial discipline. They ensure efficient resource allocation and project management.

  4. Is managing all accounting in-house advisable for growing businesses?

    While manageable initially, in-house accounting may lead to costly errors as businesses expand. Professional accountants offer expertise, uncover deductions, and mitigate IRS penalties.

  5. How can an accountant benefit small businesses?

    Accountants provide financial expertise, uncover tax-saving opportunities, and identify errors that could result in IRS penalties. Contact Vyde for professional assistance and long-term financial stability.

Accounting mistakes can be costly for small businesses. Make sure you avoid these four common accounting mistakes or hire an accountant to help you.
Accounting Tips For Really Small Business

6 Accounting Tips For Really Small Business

Before you read on, take a quick guess at how many small business start-ups fail within the first five years. No reading ahead!

According to the Small Business Administration, about half of all businesses fail within the first five years. 50% of businesses make it, and 50% don’t. Are you shocked? Maybe feeling a little unsettled about your new business venture?

If you’ve found a way to make money and suddenly it feels more like a business than a hobby or side-job, you’ve got a business on your hands. Congrats! Here are a few quick accounting tips for making sure you’re business is among the 50% that are still around five years from now.

  1. Keep it simple. Get organized, get legal, and get to work. The simplest entity you can form for now is a called a sole proprietorship. This means your business is owned and run by person and there is no legal distinction between the owner and the business. No employees, no payroll, no fuss.
  2. Obtain proper licenses and tax information. Since you’re going to be the owner/entity of your sole proprietorship, you’ve got a few other tasks to take care of. You need to acquire an occupational license (if mandated in your area) and you must remit all state or city tax collections on retail or sales your business collects.
  3. Concentrate fiercely on your business, but don’t be irresponsible. Now is the time to buckle down and build your business—find ways to market to your customers and clients, improve your products and services, and build your brand. As a sole proprietor, the IRS won’t even know you exist until after you file your first personal income tax return. You’ll file your personal taxes (like usual) and also a Schedule C form where profits and losses of your business are reported. If you don’t quite have a streamlined process of doing business yet, not to worry. For a sole proprietorship, a separate bank account is not mandated as it is for an LLLC or Corporation. If your business claims a loss during the first few years, those losses can offset your day job’s income and provide a possible tax refund.
  4. Develop an organized way to pay yourself. Another advantage of a sole proprietorship is that there are no payroll taxes taken out, and no set way you have to pay yourself. You can set up a certain percentage of profits you plan to pay yourself, or you can simply keep what’s left over after paying all business expenses. Often times, S corps don’t have to pay quarterly estimated taxes either. Click here to learn about specific scenarios when they do.
  5. Keep track of expenses and income. You don’t really have to do much with your receipts until tax season comes along, but definitely keep them in a safe place. Perhaps an easier method of tracking expenses and profits is to use a simple two-page Excel spreadsheet, one with incoming money, and the other with outgoing. You can use your business expenses as write offs at the end of the year which deduct from the amount of money owed on taxes.
  6. Plan to succeed, but be prepared for the worst. Remember that statistic from the beginning? If your business fails, no special forms are required to be reported to the IRS, you just simply stop doing business. All you have to do is file one final Schedule C and you’re done.

business experiences significant growth

After your business experiences significant growth or you hit the five year mark, talk to a CPA about changing your entity type to one that could save you more money and be more efficient for your business. Vyde offers free accounting and small business bookkeeping advice all year long. Contact us with your sole proprietorship questions and we can offer some accounting tips and point you in the right direction.

FAQs:

What is the simplest business structure for a small startup?

A sole proprietorship is the simplest entity, where the business is owned and run by one person without legal distinction between the owner and the business.

What licenses and tax information are required for a sole proprietorship?

Owners need to acquire an occupational license (if mandated) and must remit state or city tax collections on retail or sales their business collects.

How does taxation work for a sole proprietorship?

Profits and losses of the business are reported on a Schedule C form along with personal income tax returns. Losses can offset other income, possibly leading to a tax refund.

How should a sole proprietor pay themselves?

Sole proprietors have flexibility in paying themselves, either by setting a percentage of profits or taking what’s left after business expenses. No payroll taxes are deducted.

What’s the best way to track expenses and income for a sole proprietorship?

Keep receipts safely stored for tax season. Utilize a simple Excel spreadsheet to track incoming money and outgoing expenses. Business expenses can be written off at year-end to reduce tax liability.

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Vyde is a licensed accounting firm (CPA) based in Provo, Utah, and members of the AICPA. We provide professional accounting services to businesses and individuals, with a focus on small business bookkeeping and taxes.

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