As a small business owner, understanding your tax filing responsibilities is critical to meeting compliance and optimizing deductions. Use this checklist and the HoneyBook Tax Hub to gather all the documents and information needed for accurate filing.
Accurate recordkeeping is key to any filing system, and these tips will help you avoid common mistakes that could cost you money.
1. Know Your Entity
Tax filing requires an in-depth knowledge of a business’s financials, with particular attention paid to identifying and optimizing potential deductions. Furthermore, keeping meticulous records, filing on time, and staying abreast of new laws or regulations that might impact its entity are also key aspects of tax preparation for businesses that want to remain compliant and avoid penalties. Approaching business tax preparation methodically is vitally important for compliance and penalty avoidance.
Business entity classification decisions have profound tax ramifications that can affect everything from filing taxes and deductibility eligibility, to potential legal entanglements and financial implications. Consult with an accountant or tax specialist when deciding the appropriate option for an entity; their knowledge can help guide both legal and financial considerations when selecting their preferred classification option.
LLCs can choose to be taxed as either a disregarded entity (owning one owner without legal separation), partnership, S or C corporation; choosing the correct tax treatment can significantly lower an LLC’s taxable income while possibly necessitating additional filings with the IRS. CPAs or tax specialists can assist an entity with the paperwork required to change its tax classification, provide guidance regarding potential options, as well as create an overall strategy to meet its tax needs. Step one is gathering all relevant documents and numbers. This may include financial statements, expenses, sales records, payroll information and any state or local tax forms. Storing them all together in an accordion file organizer may help make filing easier come tax season.
2. Know Your Deductions
Filing business taxes requires many documents and forms regardless of your entity structure, from personal details and income items to deductions and forms you’ll need for filing. Understanding which expenses qualify as tax deductible deductions could save your business substantial funds in taxes.
As a tax return is being filed for each taxable year, many expenses can be written off as tax write-offs. A separate credit card and business bank account can help track expenses more easily; additionally, consider using an accounting journal or ledger as additional documentation of every transaction.
No matter the nature of your business, when filing taxes it’s essential that W-9 forms and 1099s are collected and issued each year at year-end in order to properly validate labor cost deductions. If you hire consultants for specific tasks consider providing them with invoices so they can claim tax-deductible portions on their income tax returns. By following these tips you can prepare yourself for tax season with confidence knowing all financial records are organized – reducing stress when filing business taxes while taking full advantage of available deductions and credits.
3. Know Your Filing Deadlines
As a business owner, knowing your tax filing deadlines is critical for complying with compliance regulations and optimizing deductions. Missing filing deadlines can result in costly penalties, adding stress to an already hectic time of year. By planning ahead and working with trusted professionals (like controllers, bookkeepers or fractional CFOs) who ensure accurate records are submitted timely tax season can become much simpler and stress free!
As part of our efforts to help you meet all of your tax-related obligations, we’ve compiled a list of important due dates for the 2025 tax year – such as key filing deadlines and 1099 deadlines.
Not that this list of dates is exhaustive or static – they may change over time! To make sure you don’t miss any important deadlines, add these to your calendar with reminders for every month, week, or day leading up to filing season. Also begin gathering income statements, expense records, and any other necessary documents in preparation of filing them with the government.
if you have questions regarding these deadlines, set up a call with one of Block Advisors’ certified small business tax pros today. Our tax pros can work with you to develop a strategy to minimize taxes and maximize deductions; remember – filing an extension can always be done online, via mail or with an accountant near your business location!
4. Know Your Options
No matter whether you hire an accountant or file by yourself, accurate recordkeeping can make all the difference this tax season. Accurate records help avoid penalties and filing mistakes while keeping a detailed account of business expenses can help decrease taxable income.
Assembling accurate business expense reports, sales receipts, and financial documents is key to accurately reporting your income and deductions. Storing them in an easily searchable folder or binder with a tax checklist makes filing your taxes simpler; additionally, keeping an accounting journal or ledger provides another handy method of keeping track of each transaction’s date, amount, and account affected.
For optimal tax deductions for your business in 2025, keep an eye out for new laws and regulations which could alter what expenses can be written off as business expenses and could even raise your tax brackets.
Maintaining accurate tax filings is a vital element of running a successful small business. Simplify your preparation process and avoid last-minute stress with these tips to get ready for tax season. With proper planning and assistance from professionals such as controllers, fractional CFOs or bookkeepers on board, your team can feel confident filing accurate returns while taking full advantage of potential deductions. Want more info about how skilled bookkeepers can save you money? Click here.
