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Tax season often feels like a looming deadline that catches many businesses off guard, year after year. But what if you could transform this annual scramble into a smooth, well-managed process?
"Fulfilling your tax obligations in a way that’s efficient and beneficial for your business might seem like an uphill battle. Luckily, some careful planning and preparation can help make the climb more manageable," said China Llanos, Digital Content Writer and Editor at J.P. Morgan Wealth Management.
If you're looking to shed the stress of tax day and gain more control over your finances, you're in the right place. Read on to learn everything you need to know to make this season as painless as possible.
When Is Tax Day for Businesses?
For most businesses, tax day falls on April 15, the same deadline as individual tax returns. However, if your business is structured as an S corporation or a partnership, your tax deadline is March 15.
“When it comes to running a business, keeping tabs on important deadlines can feel like another item on your never-ending to-do list,” shared Erin Banta, Co-Founder and CEO of Pepper Home, a company known for its cafe curtains kitchen owners love. “However, tax deadlines aren’t ones you can afford to ignore, and knowing them ahead of time can help avoid unnecessary fees and stress.”
Need to file late? That’s okay — extensions are available. In fact, businesses can request an automatic extension (until Sept. 15 for S-corps and partnerships and Oct. 15 for most others). Just remember, an extension only gives you more time to file, not more time to pay. If you owe taxes, penalties and interest may still apply.
What Documents Do You Need To File Taxes?
Are you wondering which forms you need? Here’s what to have on hand when filing your taxes:
Profit & Loss Statement
This document shows how much your business earned and spent throughout the year. It’s key for determining taxable income and reporting accurate numbers.
“Keeping clear records of revenue and expenses is one of the simplest ways to avoid tax headaches,” suggested Greg Hannley, Founder and CEO of Soba Mesa. “The more organized your financials are, the easier it is to spot deductions and avoid filing errors.”
You can usually find this report in your bookkeeping software, like QuickBooks or Xero. If you don’t use one, a spreadsheet tracking all business income and expenses works, too. Just be sure it’s accurate and up to date.
Balance Sheet
Think of a balance sheet as a financial snapshot of your business at any given moment in time. It shows what you own (assets), what you owe (liabilities), and what’s left over for the owners (equity).
“Your balance sheet is important for getting a clear picture of your financial health and can be particularly handy when you're planning big moves or checking your growth progress,” noted Jack Savage, Chief Executive Officer of Everyday Dose, a company known for its mushroom coffee.
Your accountant or bookkeeping software should have this report ready to go. If you’re managing finances manually, track your cash, outstanding debts, and owned assets to compile a basic balance sheet.
Payroll and Employee Tax Records
If your business has employees or pays independent contractors, there’s extra paperwork to keep track of. You must report wages, payroll taxes, and contractor payments to remain compliant with the IRS.
"When paying employees, businesses must file W-2 forms to report wages and taxes withheld,” discussed Shaunak Amin, CEO and Co-Founder of SwagMagic, a company that offers print on demand services. “If you're working with independent contractors and paid them $600 or more, you’ll need to send them a 1099-NEC and file a copy with the IRS. On top of that, businesses must submit Form 941 or 944 to report payroll taxes.”
Managing payroll records year-round makes tax season easier. If you use a payroll provider, they’ll usually handle these forms for you. If you’re doing it yourself, take a moment to review all payments and tax withholdings before you submit.
Receipts and Proof of Business Expenses
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Keeping track of business expenses can feel like a hassle, but it’s worth it when tax time rolls around. The IRS requires proof for deductions, so having clear records of what you spent on your business helps avoid a paperwork nightmare.
“If you’re claiming a business expense, you need a record of it,” described Leah Francis, Head of Growth at Postable, a company that offers wedding thank you cards. “That means saving receipts for office supplies, equipment, travel, and marketing costs. Bank and credit card statements can help, but actual receipts and invoices are the safest way to back up your deductions.”
A simple system makes this easier. Snap photos of receipts or store them digitally. You can also use accounting software to log expenses as they happen. The key is keeping everything organized so you’re not scrambling to track down paperwork.
Tax Forms for Your Business Type
Every business structure has different tax forms to file. Whether you’re flying solo or part of a larger team, it can affect the paperwork you have to gather.
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"If you're a sole proprietor or have a single-member LLC, use Schedule C to report your business's income and deductions,” explained Valerie van der Linden, Integrated Marketing Manager of Javvy Coffee, a company that specializes in coffee concentrate. “For those in partnerships or multi-member LLCs, you're looking at Form 1065. S-Corporations fill out Form 1120-S, and C-Corporations use Form 1120.”
If you’re not sure if you have the right form, it’s always a wise idea to double-check with a tax professional. Using the wrong form can delay your return or, worse, lead to penalties. A quick consultation can save you time and trouble, ensuring everything is squared away come tax time.
What Tax Deductions Can Businesses Take?
This article has mentioned deductions a few times, but what exactly are they? And what can businesses actually deduct? The short answer is that deductions lower your taxable income by accounting for necessary business expenses. That said, knowing what qualifies can help you save more when filing.
“A tax deduction is anything you spend on your business that’s considered a legitimate expense — within reason. If it’s something you need to run your business, there’s a good chance it’s deductible,” added Joseph Chak, Director of eHobby Asia, a company known for its airsoft guns.
Common deductions include office rent, internet, phone bills, travel, equipment, and professional services like accounting or legal fees. If you work from home, you may be able to deduct a portion of your rent or utilities. A good rule of thumb? If it directly helps your business make money or operate smoothly, it’s worth looking into a deduction.
What Are Some Common Tax Filing Mistakes To Avoid?
Mistakes can slip through the cracks no matter how many times you’ve filed business taxes. Fortunately, there are ways to sidestep common slip-ups and keep tax season running smoothly.
Filing Late
Deadlines come fast, and sometimes, things don’t go as planned. Life gets busy, paperwork slips through the cracks, and suddenly, tax day has passed. Missing the deadline doesn’t mean all hope is lost, but it can come with penalties and added costs — especially if you owe taxes.
"Any business owner will tell you that taxes are not something you want to mess with,” underscored Dr. Manjula Jegasothy, Co-Founder of MiamiMD, a company known for its crepe skin cream. “Filing late or not at all is a recipe for penalties, stress, and a larger tax bill than you started with.”
To stay on track, set reminders well in advance, keep important documents in one place, and don’t wait until the last minute to gather everything you need. If you know you’ll need more time, filing an extension is a simple way to give yourself breathing room. If you’re struggling to pay, the IRS offers payment plans to spread out the cost and minimize penalties.
Guessing on Numbers
Estimating income, rounding off expenses, or making up numbers on the fly might seem harmless, but accuracy matters. If your reported income doesn’t match what the IRS has on file or your deductions look inconsistent, it could trigger an audit or delay your return.
"When numbers don’t add up, the IRS takes note,” highlighted Ryan Woodbury, Co-Founder of Needed, a company that offers postpartum vitamins. “Even small discrepancies can slow down your filing process or lead to follow-up questions.”
Instead of guessing, rely on real records. Give your numbers a once-over before submitting your return. If something doesn’t add up, take the time to fix it before filing. Tax software can help catch common mistakes, and an accountant can review your numbers to make sure everything is accurate before you send them off.
Keeping Poor Records
Messy records make tax time much harder than it needs to be. Without a clear system for tracking income and expenses, you’re more likely to miss deductions, report incorrect numbers, or spend hours sorting through old paperwork at the last minute.
“Waiting until tax season to organize your records is asking for stress,” pointed out Griff Duncan, Digital Marketing Manager of CON-CRĒT, a company known for its creatine pills. “Set up a habit of recording income and expenses regularly, even if it’s just a quick note or a digital upload.”
Even if you’re not using accounting software, a simple spreadsheet or a folder for receipts can go a long way. Make it a habit to review your records every month instead of letting them pile up. That way, when tax season rolls around, everything is already in order, and you’re not stuck scrambling for paperwork.
Ignoring Professional Guidance
Trying to DIY your business taxes might seem like a good way to save money, but it can end up costing you more in the long run.
"Tax laws are complex and ever-changing, and expert guidance and resources can help ensure you are compliant and maximizing your tax benefits," stated Barbara Schreihans, CEO and Founder of Your Tax Coach.
Finding the right tax professional starts with looking for someone who specializes in business taxes and understands your industry. Certified public accountants (CPAs) and enrolled agents (EAs) are trained in tax law and can provide more in-depth guidance than general tax preparers. Reading reviews, asking for referrals, and scheduling a consultation can all help.
Tax Season, Handled
Filing business taxes doesn’t have to be a stressful, last-minute rush. With the right preparation, good record-keeping, and expert guidance when needed, you can get through tax season with less hassle and fewer surprises.
Stay ahead of deadlines, keep your documents organized, and don’t be afraid to ask for help if you need it. The more proactive you are, the smoother things will go — not just this year but every year after. You’ve got this!
*The San Francisco Examiner newsroom and editorial were not involved in the creation of this content.
