As a small business entity, it is important to complete a tax return each year to accurately report your income and expenses to the government. Here is a step by-step guide on how to complete a tax return as a small business entity.

1. Gather necessary documents: Before you begin, make sure you have all the necessary documents and information. This includes any tax forms or documents related to your business income, such as a 1099 form for freelance work or a K-1 form for partnership income. You will also need information on any business expenses, such as supplies or equipment.
2. Determine your business structure: The first step in completing your tax return is to determine your business structure. This will determine which tax forms you need to fill out and how you will report your income and expenses. If you are a sole proprietor or single-member LLC, you will report your business income and expenses on your personal tax return using a Schedule C form. If you are a partnership or multi-member LLC, you will need to fill out a Form 1065. If you are a corporation, you will need to fill out a Form 1120.
3. Calculate your business income: The next step is to calculate your business income. This includes all income earned from your business, including sales, commissions, and any other sources of income. Be sure to include any income reported on tax forms, such as a 1099 or K-1 form.
4. Calculate your business expenses: Once you have calculated your business income, it is time to calculate your business expenses. This includes any expenses related to the operation of your business, such as supplies, equipment, rent, and utilities. Be sure to keep all receipts and documentation for these expenses as you will need them for your tax return.
5. Determine your net income: To determine your net income, you will need to subtract your business expenses from your business income. This will give you your net income, which is the amount of income you have left after deducting your expenses.
6. Calculate your self employment tax: If you are a sole proprietor or single member LLC, you will need to pay self-employment tax on your net income. This tax is calculated using a formula provided by the IRS and is based on your net income.
7. File your tax return: Once you have calculated your self-employment tax, you are ready to file your tax return. To do this, you will need to fill out the appropriate tax form, such as a Schedule C for a sole proprietor or a Form 1120 for a corporation. You will also need to attach any supporting documentation, such as receipts for business expenses.
8. Pay any taxes owed: If your tax return shows that you owe taxes, you will need to pay them by the deadline. This can be done by mailing a check or paying online through the IRS website.
   
   

Completing a tax return as a small business entity can be complex, but with careful planning and organization, it can be a straightforward process. By gathering all necessary documents, determining your business structure, calculating your income and expenses, and filing your tax return, you can ensure that you are accurately reporting your income and paying the appropriate taxes. Contact Dire Wolf Consulting today to request assistance with your tax return!