As a business owner, it’s important to understand your federal tax requirements. This paper is prepared for you to understand your responsibilities in federal taxation period as a business owner in the US. There are important dates for filings and payments. Also, you can see how to calculate your federal taxes and why bookkeeping and accounting services are a must for your company. This paper will help you to understand how to file your taxes accurately and make payments on time with Clemta.

Annual federal filing is a mandatory requirement for any company registered in the United States.

The filing deadline for the company owners is April 15th of every year. However, between January 1st and April 15th is known to be the tax season and accounting firms and services experience the busiest times of the year.

If you have structured your company between January 1st, 2021, and December 31st, 2021, you’ll need to complete annual filing until April 15th, 2022.

IRS does not look at the active or inactive status of the company. The requirement is that companies must complete annual filing every year.

Clemta offers you the accountant services you need to provide for your company. You’ll be working with one of our CPA’s who will review and prepare the documents for you.

HOW TO CALCULATE YOUR FEDERAL TAX:

Estimating a tax bill starts with estimating taxable income. In a nutshell, to estimate taxable income, we take gross income and subtract tax deductions. What’s left is taxable income. Then we apply the appropriate tax bracket (based on income and filing status) to calculate tax liability. Tax credits and taxes already withheld from your paychecks might cover that bill for the year.

Federal tax is calculated as: revenue – expenses = income.

Later, your income is taxed anywhere between %10 – %37.

This goes for the LLC’s.

If your company is a C-Corp, then first you will have to pay 21% corporate tax, then follow the abovementioned process to spend your earnings as personal income.

We are sharing a calculator where you can simulate desired revenue amounts to see the tax levels. Also, please note that the tax numbers will be higher on this number as it includes some taxes that only U.S. residents will pay.

U.S. Tax Calculator

BOOKKEEPING

Bookkeeping is the recording, on a day-to-day basis, of the financial transactions and information about a business. It ensures that records of the individual financial transactions are correct, up-to-date, and comprehensive. Accuracy is therefore vital to the process.

If you started your own business lately, you would probably want to concentrate on running your business properly and make your company grow. You will have a lot of information to track and record for your company. It might be a burden to record all the details of every financial transaction to a business owner.

Without proper bookkeeping, it would be easy for transactions to go unrecorded, left to pile up until the end of a financial period. Mistakes could be made, and important details could be lost or forgotten. With proper bookkeeping, you can lighten the load on the business.

Our bookkeepers are trained and use the same financial recording methods as accountants. They do this so that your accountant can quickly and easily process your financial information. They will:

1. Take all your receipts, invoices, and other transaction details.
2. Record the information in accounting software using proper accounting methods.
3. Work with you to make sense of the numbers, for example assigning costs to specific clients.

WHY DO YOU NEED TO WORK WITH A CPA?

CPAs can wear many hats for your small business. They handle bookkeeping, preparing important financial documentation (e.g., tax documents and profit-and-loss statements), financial planning, and tax filing, among other tasks.

They can also provide sound financial advice for your business as you continue to grow, so you can concentrate on running your business. These are the general responsibilities you can expect from a CPA:

• Tax filing, planning, and advice: CPAs are qualified to handle all of your business tax needs, including year-round recordkeeping and filing tax extensions with the IRS.
• Tax and financial compliance: If you are audited, CPAs can reduce the cost of audit findings by negotiating with the IRS on your behalf. Because of their extensive knowledge, CPAs can catch financial and tax problems before they become an issue, thus preventing an audit.
• Consulting: CPAs can assist you with important financial decisions, budgets, financial risk management problems, and other financial services. They can also provide valuable advice on complicated financial matters.
• Forensic accounting: CPAs can help monitor your books and prevent fraud.
• Payroll: If you’re not already using top payroll software, CPAs can set your business up with a platform that works for your company.
• Bookkeeping: CPAs are qualified to help you create, maintain, and review financial books throughout your business lifecycle.

FEDERAL TAX FILING PROCESS WITH CLEMTA

Let us share the details of what the federal filing process with Clemta will look like:

1. A tax form is sent out to our customers to gather financial information alongside partners’ information. If you have completed the bookkeeping on your own, please share the bookkeeping documentation with us. If you haven’t drafted bookkeeping, then please share your Business Bank Account Statements, so we can help you through the bookkeeping in return for a small fee.
2. Clemta CPAs (Certified Public Accountants) review the documents and prepare a draft copy.
3. A draft copy is sent out to our customers for a review period.
4. Once the review is completed, a complete filing set is sent out to our customer for approval.
5. After your confirmation, we’ll send the documentation for your e-signature through Docusign.
6. Lastly, the tax filing will be submitted to the IRS and the federal filing will be completed.

Clemta Taxation Team