Tips to Keep in Mind while Filing Your Small Business Tax Returns

Posted by Aaeesha on May 20th, 2015

If you’re running a small business, then you should definitely keep a close eye on your accounts, cash flow and profits. There are many laws that govern the payment and income tax and the filing of the business tax returns. These income tax forms are labeled using alpha-numeric indicators and each form has a specific purpose. A basic research will give you a clear idea of the various forms and the ones that you have to fill for each purpose. You will have to fill in the 2E form in order to file for your income tax returns. Also called as NAYA SARAL Form or ITS-2E, this form is created based on the rules and regulations set by the Income Tax rules of 1962 and the Income Tax Act of 1961. The other forms for filing income tax returns are 3CA, 3CB, 3CD and 3CE. 

Before you fill up the form file your income tax returns, here are some tips that you should keep in mind: 

Understand the Form

First completely read the form carefully and understand all its components. You will not be able to provide attachments for most of the income tax forms, but for the 2E form, you can add attachments. You can also take the advice of an auditor when you’re filing tax returns for the first time. The next time you can work on it by yourself. 

Deduct Your Insurance Costs

Make sure you add in all your insurance costs while filing your business tax returns. From office and vehicle insurance to medical and life insurance premiums, you can deduct the entire amount from your income tax. If you are the sole owner of the business or are running it with your spouse or a partner, you can take in your personal medical insurance also into account.

Tally your Travel Expenses

Keep detailed accounts of your travel expenses along with all the receipts and bills. Whether you travelled to visit a client or have entertained a client who visited your office, you can add the total amount to your deductions. You may be able to get 100 percent deduction on the entire travel and entertainment expenses. 

Take Your Time

Keep an eye on the last date to file income tax returns, and start putting together all the details in advance. In case you’re short of time, see if you can apply for an extension. Also have all the receipts and bills for all your expenses.