⚡ Quick Answer: Prepare your small business for tax season by: organizing receipts, reconciling bank accounts, reviewing P&L, gathering 1099 info for contractors, maximizing deductions (home office, vehicle, retirement), and setting aside estimated tax payments. Full tax prep checklist below.
Tax season is less stressful when you prepare year-round rather than scrambling in March and April. This guide walks you through the key tasks to complete before filing your small business taxes, along with the most commonly missed deductions.
Key Takeaways
- Good year-round bookkeeping makes tax prep dramatically easier
- The home office deduction is one of the most commonly missed by small business owners
- Don’t miss the Section 179 deduction for equipment purchases
- Quarterly estimated tax payments are required for most self-employed individuals
- Hire a CPA if your business has employees, inventory, or made over $100K
Tax Prep Checklist for Small Business Owners
December/Year-End
- Review all outstanding invoices — collect as much as possible before year-end (or delay if it benefits your tax situation)
- Make year-end equipment or software purchases to take advantage of Section 179 deductions
- Max out retirement account contributions (SEP-IRA, Solo 401k)
- Review your inventory count
- Send W-9 requests to any contractors you’ll need to issue 1099s to
January
- Issue W-2s to employees by January 31
- Issue 1099-NECs to contractors paid $600+ during the year by January 31
- Reconcile all bank and credit card accounts through December 31
- Generate your full-year P&L and balance sheet
Before Filing
- Gather all receipts for deductible expenses
- Calculate home office deduction (if applicable)
- Calculate business mileage deduction
- Review all loan statements for deductible interest
- Compile health insurance premium records
Commonly Missed Small Business Deductions
| Deduction | Notes |
|---|---|
| Home office | $5/sq ft up to 300 sq ft (simplified method) |
| Business mileage | $0.67/mile for 2024 (check current rate) |
| Health insurance premiums | Self-employed owners can deduct 100% |
| Retirement contributions | Up to $69,000/year via Solo 401k |
| Section 179 equipment | Deduct full cost of equipment in year purchased |
| Business meals | 50% deductible with proper documentation |
| Software subscriptions | Fully deductible as business expense |
When to Hire a CPA
Consider hiring a CPA if your business has employees, an S-corp or partnership structure, revenue over $100K, inventory, or any unusual transactions. The cost of a CPA ($500–$2,500 for a small business return) is almost always outweighed by the tax savings and peace of mind they provide.
This content is for informational purposes only and does not constitute financial or tax advice. Consult a qualified CPA for advice specific to your situation.
Frequently Asked Questions
How do I prepare my small business for tax season?
Start 60 days before your filing deadline: reconcile all bank accounts, categorize uncategorized transactions, gather contractor W-9s for 1099 filing, review depreciation schedules, confirm estimated tax payments made, and compile business deduction documentation.
What deductions can a small business write off?
Common small business deductions: home office (direct or simplified $5/sq ft), vehicle mileage (67 cents/mile in 2024), equipment and software (Section 179 up to $1.16M), health insurance premiums, retirement contributions (SEP-IRA up to $69K), and professional services.
When are small business taxes due?
S-Corps and partnerships: March 15. C-Corps and sole proprietors with Schedule C: April 15. Quarterly estimated tax payments are due: April 15, June 15, September 15, and January 15. Extensions give 6 extra months but do not extend payment deadlines.
Do I need an accountant to file small business taxes?
Sole proprietors with simple returns (no employees, limited deductions) can self-file with TurboTax Business. (TurboTax Home & Business 2025) S-Corps, C-Corps, partnerships, and any business with employees, significant assets, or complex situations should use a CPA.
How much should I set aside for small business taxes?
Self-employed business owners should set aside 25–30% of net profit for federal and state income taxes and self-employment tax (15.3% on net income). Use a dedicated tax savings account and make quarterly estimated payments to avoid underpayment penalties.
Recommended Resources
Related Articles
- TurboTax Home & Business 2025 — File federal and state taxes for your small business — PC/Mac download.