Owning a small business means you have a lot on your plate. Finding the time to manage your books may be difficult, especially when you’re dealing with persistent economic uncertainties and tax regulations.
For this reason, being organized throughout the year helps facilitate the filing process when tax season arrives. We’ve put together the crucial actions you must do in order to expedite the preparation and submission of your small company taxes.
The seven fundamentals of filing small business taxes are broken down in this 2025 small company tax preparation checklist. To keep track of your small company tax preparation requirements, including which tax forms to submit and what paperwork to collect, there is also a printable checklist available.
Understand the Small Business Taxes
The IRS and state tax authorities require all firms to pay specific taxes. It is your duty as a small company owner to make sure that you fulfill your state and federal tax duties.
These are the five primary tax forms that your company may be liable for, regardless of whether you operate as a sole proprietorship, partnership, S corporation, or C corporation.
Schedule C of Form 1040 is where sole owners record their business’s earnings and outlays. Their individual income tax rates are applied to their profits.
Partnerships record their earnings and losses on Form 1065. A Schedule K-1 detailing each partner’s portion of the profit or loss is provided to them, and they report it on their own Form 1040.
S corporations record their earnings and losses on Form 1120-S. Each shareholder is given a Schedule K-1 to submit with their Form 1040, just like in partnerships.
States and occasionally cities have different state income taxes on businesses. You can have various filing obligations in different jurisdictions depending on where you conduct business and earn money. It is advisable to speak with your tax expert if you are subject to any of the complicated regulations and requirements.
Understand what business tax forms you need to file
There isn’t a single corporate tax form that works for everyone. You will require particular papers, such as Form 1099-MISC or Form 1120, to record earnings, losses, deductions, and credits to the IRS, depending on the nature of your firm. The following IRS forms are often used for small company tax reporting:
Schedule C: This form is used in conjunction with Form 1040 to declare your income if you are a lone owner.
Schedule K-1: This form is used to record revenue for owners of pass-through businesses, such as partnerships or S corporations.
1099-MISC: This form is used to record payments to lawyers or rental revenue to landlords.
The 1099-NEC form is used to record payments paid to non-employees.
Form 1120: Use this form to record income if your company is a C corporation.
Partnership owners utilize Form 1065, which is an information return that is filed independently of their personal income tax return.
Form 720: This is where you report business-related excise taxes.
Gather the needed business tax return documents
The amount of paperwork involved in paying taxes for your small business might be daunting. It is essential to know which papers to submit and which forms to complete.
An outline of the tax records you may need to collect prior to filing is provided below:
Accounting journals and ledgers: These offer thorough documentation of your company’s annual transactions, including the date, quantity, and accounts impacted by each one.
The financial position (assets, liabilities, and equity) and performance (revenues and costs) of your company during a certain time period are summarized in the income statement and balance sheet.
Transactional supporting documents: These comprise any records, such as bank statements, invoices, and receipts, that offer proof of your transactions.
Bank deposit slips: These serve as confirmation of the sums of money and cheques that have been placed into your company’s bank accounts.
Make note of common tax deductions and credits
Tax credits and deductions are great ways to lower your small company tax liability. This is due to the fact that some investments and expenses, including health insurance and office costs, may be deducted from your taxable income, which lowers the amount you will owe after filing your taxes.
One crucial step in completing your business taxes is determining whether tax credits and breaks may be applicable to your company.
Complete your small business tax checklist
This small company tax checklist will help you file your taxes more easily, whether you’re handling your business taxes alone or with the help of a qualified tax preparer.
Create a tax filing calendar
It’s simple to forget about tax deadlines when you run a small business. Therefore, it’s critical to remember when you have to file your taxes and when your payments are due.
Regretfully, the IRS does not tolerate lateness or nonpayment. Think about making a tax schedule to maintain a healthy cash flow for your company.
Request a filing extension if needed
Consider asking for an extension if your tax situation is complex or you are unable to collect all of your documentation by the standard tax deadline. A six-month extension for reporting your business revenue can be obtained by submitting Form 7004.
Keep in mind that a file extension does not provide you extra time to make your payment. During this time, you still have to make your projected tax payments. There might be a fee for falling behind.
The IRS is anxious to collect tax payments, just like other taxpayers, and is frequently open to working with small company owners to find a solution. Talk about a payment plan with the IRS in advance if you have trouble making your payments on time. The sooner, the better.
Find Your Peace of MindFiling taxes doesn’t have to be as onerous as running a business. With TheboomHK by your side, the time you would have spent managing intricate state tax, sales tax, and employment matters can be saved using our small business tax preparation checklist—allowing you to reinvest that time back into your company.
Chuyên mục: Trending gossip