Spring is in the air, which means the temperatures will become warmer, plants will begin to blossom, and the days will become shorter. But this time of year also signals tax time. As a small business owner, you should prepare your Quickbooks accounting software ahead of time to ensure you are ready by April. Here are some tips to help facilitate this process.
Tax Form Used
Quickbooks supports all of the major tax forms, including 1040, 1120, and 1065. Before filing your taxes, however, you should double-check the entries in your account to ensure the correct forms are being used. This is done by logging into your Quickbooks account and choosing Company > Company Information. At the bottom of this window is a field for “Income Tax Form Used.” If the form is incorrect, click the drop-down arrow and choose the correct form.
In addition to checking the tax form used, it’s also a good idea to check the company information associated with the form. This information is found in the same area as tax form used, under Company > Company Information. Keep in mind that Quickbooks requires the legal name of the company. If a company has a different name under which it files its taxes, you should enter it here. Also, double-check the company’s address and report information while you are on this page.
Run Tax Reports
Of course, you’ll want to run tax reports form Quickbooks to help facilitate the process of filing your taxes. Whether you intend to file yourself, or if you plan on outsourcing the task to a professional CPA, you’ll need these reports in hand. The first tax report that you’ll need is the Income Tax Preparation Report, which contains a list of all of your accounts as well as the tax line to which they are assigned. You can unassign them bu double clicking on them if necessary.
The other two tax reports are Income Tax Summary and Income Tax Detail. As the name suggests, the Income Tax Summary report provides a basic overview of your income taxes, whereas the Income Tax Detail report contains a more detailed report of your income taxes. When running the Income Tax Summary report, pay attention to the Tax Line Unassigned. You can double-click on these entries to see accounts that must be assigned to a tax line.