It’s the time of year when all business owners are now thinking about what taxes they will have to pay. Taxes must be paid by both big and small businesses.
Being a cleaning business owner, it’s wise to make sure you are ready to file by the time March comes around. Knowing what expenses you are able to write off ahead of time will help to determine what you can expect to owe, or in some cases expect to receive back.
There are several important dates to keep in mind. This year, the IRS will start accepting taxes on January 29, 2024. The deadline for employers to give employees their W2’s is January 31, 2024. Personal taxes are due April 15, 2024, and corporate taxes are due March 15, 2024.
You can always request an extension if you need more time, but it must be done before the above due dates.
Let this blog be a source of guidance on what is required of you to submit to the IRS before you set up an appointment with your tax preparer:
1. The subcontractors will be given a 1099 by the company they worked for. Since the company you cleaned for did not pay any taxes for you, hopefully you have already set up quarterly payments for yourself.
2. The solo cleaner who is most likely a sole proprietor will have to file their total gross income on their personal taxes.
3. The cleaner who worked as an employee for a company will be given a W2 to report earnings on their 1040 taxes.
4. The cleaning company corporation must provide W2’s to their employees and file their gross salaries paid. They can also file other deductions that corporations are allowed to write off on their gross sales.
Each group must pay taxes, and each has a different set of liabilities and write-offs that can be deducted. Best practice is to find a tax preparer that is familiar with small businesses and can give you the best advice.
A few things to consider are the following: what your supplies cost, how much mileage you put on your vehicle, how much you paid for marketing, office space, sales tax, car repairs, and any business related purchases like car decals, printer ink, and paper. All of these can be written off for all forms of cleaning businesses.
As a corporation, I itemize many business expenses, so it helps to have QuickBooks or another software that can automatically run your reports for you at the end of the year.
Keeping receipts is also important in case you are audited. There are easy and efficient scanner software you can use to store receipts digitally instead of the old way, in a box or paper bag.
We all know that taxes are a part of our lives we all must do annually, and although it only happens once a year it can be a stressful time. In the long run, avoiding getting organized about taxes will cost you more through penalties and interest in the case that you owe taxes.
My last piece of advice is to find a tax professional that you can trust with all your personal information and know that your information will be stored safely. I always take a sigh of relief when I walk out of my accountant’s office each year knowing I took care of my responsibilities and can now go and start my new year with a clean slate!
As always, feel free to reach out to me with any questions on Facebook or Instagram @virtualbidapp, or email me at email@example.com. We are excited to announce our first ever Facebook Live Q&A on Saturday, February 10th at 12:00PM-1:00PM CST. Join the Facebook group here, and I look forward to answering all of your cleaning business questions!
Now go take a bite out of grime!!
Founder & CEO, Heaven Scent Home Cleaning & Virtual Bid App