A tax guide for small-business owners

3. COMPLETE THE PROPER TAX FORMS

Prepare the proper tax forms to report any business income or loss, legitimate deductions and estimated taxes. These forms will be filed along with or in addition to your personal 1040. Common tax forms include:

— Schedule C: Report profit and loss (sole proprietor) .

— Form 1120 or 1120S: Report income, gains, losses, deductions and credits (corporations).

— Schedule K-1: Report business expenses, income and losses (partnerships). Typically filed along with Form 1065.

You may also need to file specific forms for depreciation , home-based businesses , self-employment taxes and estimated taxes .

4. LEAN ON A TAX PROFESSIONAL

If your business model is straightforward and your records are organized, you may not need the help of a tax professional.

But if you’re just starting out or your business has changed, they can help you identify deductions, determine the best structure for your business and head off future tax headaches.

Most importantly, they can make sure you don’t pay too much or too little.

“One of the primary benefits of small-business ownership is to strategically claim write-offs to reduce your potential tax exposure,” says Joseph Gutierrez, a certified public accountant with the Tax Group Center . “This can require a sophisticated understanding of the tax code and the percentages and type of deductions other businesses of similar stature claim.”