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How to Proceed With Income Tax Return Filing?

Summary: To file for your taxes, you can look forward to this blog to get the complete information.

The tax season has just begun and if you are running your e-commerce business, in that case, you might be troubled with respect to the tax payment. You must understand that missing on the deadlines might attract huge penalties and you would always like to avoid the penalties. For entrepreneurs and sole-proprietors who are running their e-commerce business, they can avoid the wrath of taxation in the form of penalties by adhering to the following dynamics.

Do not fail on the Tax Deadline

Most of the tax computation takes place by the end of March but for those countries which are following the English calendar, they must pay the taxes by the end of December. You need to file the tax return based on the nature of the business. For those individuals who are about to file the return, they must consider the following aspects.

February 2: Form 1099 and W2 Postmarked

On or before February 1 for Indian businesses, the record of the entry for the payment of $600 must be recoded. Such payments are in lieu of contractual services.

March 17: Partnership Returns

On March 15, 2017, it is mandatory to file the individual and partnership return. The earlier deadlines are meant to give the partner the chance to get K-1 returns before the due date.

April 17: Corporate Tax Returns

Corporate houses must file for the returns on or before April 17 by filling their application on Form no. 1120 and 1120s.

April 17: Individual Returns Due

On April 17, you must file the tax return as individual or sole proprietor, in most of the cases you can ask for tax extension as well.

Make the Receipts Organized

The digitalization is the essence to maintain your records upbeat and upfront. When you are going with digital receipts, it can help you save the time and energy to maintain paper documents. Digital records are easy to handle and you can organize the paper in the best possible way. When all the papers are up-to-date, it can help you easily file the returns and get things properly maintained.

Get Book-keeping Updated

Keeping the books of account updated will always help you in filing for the returns. There are many online accounting software which you can use to record the transaction. Most of the times you can also hire a book-keeper who can help you in recoding the entries and flawlessly maintaining the books of the account. When the books are up-to-date, the tax officials would be pleased and they can easily facilitate the tax payment.

Submission of Form 1099s

If you have paid more than $600 to an independent contractor, you must have sent him/her a Form 1099s by February 1, and subsequently you must submit a copy of the document to the IRS.

Sales Tax Filing

Sales tax filing is one of the most challenging pursuit which one would come across. Most of the sales taxes have been dictated by state rulings. For any business no matter whether they are e-commerce or any other form of operation, they must develop a nexus with the state for collecting the sales tax. Most of the businesses have nexus with the state where they live; however, for those businesses which are wishful of expanding their footprints, they can look forward to provisions which have been mentioned in the income tax rules. In order to create the nexus with the state, the following things must be catered forth.

  • An office
  • Employees
  • A warehouse
  • Hosting a pop-up shop or selling at a craft fair
  • Storing inventory

Filing for Extension

If you have forgotten to file for the return, you can claim for the extension by filling up the extension form. You will have to just include the nature of the business and subsequently you can file for the return. But filing for extension doesn’t mean that you have failed on the tax payment on given deadlines, in such case, the extensions will stand null and void. Few deadline dates which you must consider:

Partnerships-Filing Date March 15, 2017- 7 month extension, use form 7004 for filing the extension

Corporations-April 17, 2017- 6 months extension, use form 7004 for filing the extension

Sole Proprietor-April 17, 2017- 6 months extension, use form 4868 for filing the extension

The deductions

Under the income tax rule, you can file for the deductions like electricity, telephone, education, contractor cost, shipping, vehicle use, equipment purchase and professional services are all exempted. At the time of filing the return, you must pay heed towards all these deductions and subsequently manage with the income.

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