QuickBooks makes tax time less stressful by helping you to organize your tax information to provide to your accountant. If you want to do your own taxes, you can also import your taxes into Intuit TurboTax, a complementary program offered by the makers of QuickBooks. Keeping accurate records with QuickBooks ensures that you get all your business deductions and credits.
When you initially set up QuickBooks, the wizard asks you to select your tax filing status. Each filing status uses a different form. A Sole Proprietor uses Form 1040, Corporations can use Form 1120 and S Corporations use From 1120S. The choice you make in the tax setup affects the way QuickBooks manages your tax lines. Also, by selecting the right tax filing status in the QuickBooks setup menu, additional accounts that you need for different types of businesses get added to your Chart of Accounts. For instance, a charity might need an additional account for charitable contributions.
The Chart of Accounts contains all of your expense and income accounts and provides quick access to each register. Make sure you set up each account to use the correct tax line. You may need to consult with an accountant to ensure you select the appropriate lines. The tax lines allow you to create reports that make it easier to export your data into an external tax preparation software or provide to your accountant. You might select "Schedule C: Profit and Loss From Business" and choose the type of loss such as "Repairs and Maintenance" or "Other Business Expenses.
Submitting your payroll tax forms to the appropriate state or federal agency provides an important part of your tax management strategy. You can submit a payroll tax form once you enter your expenses, employee paychecks and independent contractor information into the Employees Center. Use the Process Payrolls option within the Payroll Center and then select the type of form you want to process. QuickBooks automatically checks for any errors and alerts you before you attempt to send the information to the appropriate tax agency.
The Reports Center provides several important forms that allows you to create reports for your account or to help you manually enter information into your company's tax forms. One important report, called the Sales Tax Liability Report, allows you to view how much tax you owe before completing your taxes. By running reports, you can review the transactions in your account and correct any errors or omissions before attempting to complete your taxes with the help of an accountant or tax software.
ProSeries, TurboTax, TurboTax Business, or Lacerte tax programs all provide import options for QuickBooks. Once you have checked your reports and submitted your payroll information using QuickBooks, you can use one of these programs to import a QuickBooks file and reduce the amount of work required when inputting your financial information. Intuit provides these software applications along with the QuickBooks software to provide a tax solution that works for your business. LaCerte works well for accountants, ProSeries provides support for those with more experience completing taxes and TurboTax works well for those without much tax preparation experience.
Information in this article applies to QuickBooks 2013. It may vary slightly or significantly with other versions or products.