Small business owners and business persons have to pay tax on the income and profit they earn from their initiative/company etc. If you pay business tax based income as per Schedule C, then all your personal and business income come under calculation of tax on business. As per IRS rule, you have to pay a minimum 90% of income taxes and self-employment taxes in a year to avoid penalties.
How Do You Calculate Tax on Small Business?
To calculate estimated taxes for business from Schedule C, you must combine other income information with business income, deductions, tax withholding of federal income taxes from personal income, and credits on your personal tax return.
You also have to calculate the self-employment tax (medicare taxes/social security taxes for business owners) to estimate the taxes due.
What Do You Require to Calculate Tax on Business?
You require an estimate of business income and expenses for the tax year. It is possible to utilize income from previous years or income up to the present date to estimate income for the remaining period of the year. You may have to consider your credit.
The procedure is complex and even a simple mistake in calculation can land you up in trouble and make you pay hefty fines or miscalculate the income and tax amount.
Why Should You Consult a Tax Attorney?
If you own a business, it is best to hire a tax attorney who will take care of all your estimate tax payments and calculate the same accurately. Thus, you save time and efforts invested in tax calculation, and can rather utilize these resources for other tasks.
Besides, the tax lawyer can help you make important decisions that will acquaint with smart ways to attain tax deductions and save on taxes in most feasible manner.
How Does A Tax Lawyer Help in Dealing with IRS?
A tax attorney can find ways in which you can save several thousands of dollars in filing your business tax. IRS states that itemization of deductions is essential if you cannot make use of standard deduction.
Itemizing can be tricky but a tax lawyer can make this task easier. He or she can assist you with tackling an audit notice from IRS. If you feel that IRS is pursuing an invalid claim against you, then the tax attorney can advocate in your defense at the tax court.
On the other hand, tax lawyers are also completely aware of the legal ways you can save money on business and take advantage of tax credits. They can communicate with IRS officials and file an appeal for a tax court decision.