As a small business owner, taxes can be overwhelming and intimidating. With so much to learn about filing requirements and deductions, it’s easy for even the most seasoned entrepreneur to become confused. 

To help you out, we’ve put together a list of top tax tips designed specifically for small business owners like you. By understanding these tax tips for small businesses, you can make sure your business runs smoothly from year-to-year and ensure that your return is accurate. 

So let’s dive in!

1. What Is Your Preferred Business Structure?

Establishing a proper structure for your business is one of the most important tax tips any entrepreneur or small business owner should follow. Take into consideration your industry and objectives, and regulations. This can help you determine the best legal status for your organization. 

Think about how you can protect your personal assets from liability, secure sources of financing, set up a retirement plan, or benefit from certain deductions at tax time. Also consider how much documentation you’ll need to prepare and, who will do it, and what type of filing you’re required to do with the IRS. 

Type of Business Structures

  • Sole Proprietorship – This is a business structure wherein the business is owned and operated by one person. It is a type of business structure that allows individuals to keep full control over the operations, profits, and decision-making without the need for partners or shareholders.
  • A limited liability company (LLC) – It is a type of business entity that offers both pass-through taxation and limited liability protection to its members. An LLC combines the characteristics of corporations and partnerships so business owners can take advantage of it. 
  • S Corporation – S corporation is a unique legal business entity that offers benefits to small business owners by allowing them to pass profits and losses to their shareholders on an individual level while avoiding taxation at the corporate level. This structure can save a business owner money in taxes since each employee or shareholder’s income is only subject to personal tax rates. 
  • C Corporation – It is a business entity that has separate legal status from its owners, and it is the most common type of corporate entity in the United States. It enables corporations to gain limited liability, meaning if it runs into financial difficulty, the shareholders are protected from individual responsibility within their own finances.

Nonetheless, with careful research and proper planning, declaring and operating under the right structure can make a big difference when it comes time to file taxes. It is best to consult the right tax CPA near you to help you better understand what’s the best option for you.

2. Startup Cost Deductions

Many businesses are not successful in the beginning due to not having enough funds, but that does not have to be the case. Taking advantage of startup cost deductions can help reduce the initial amount of money needed and make it easier for entrepreneurs to launch their ventures. 

These specific tax deductions from the Internal Revenue Service (IRS) allow businesses to deduct certain expenses they did not recuperate while they were launching their companies. 

Deductible costs include:

  • Research and development
  • Legal fees
  • Investigation activities 
  • Organization cost 

Keep in mind these IRS allowances are subject to certain rules and restrictions – be sure to look into any prior qualifications established before planning to utilize them as part of your startup budgeting plan. 

3. Understand Small Business Tax Deductions

One of the best ways to understand which small business tax deductions are available to you is by consulting with a qualified tax accountant or tax expert. Depending on your circumstances, you may be able to take advantage of deductions across a range of areas. 

Common small business tax deductions include costs associated with employee wages and benefits, transportation, advertising expenses and other day-to-day operating costs.  Additionally, some expenses for office supplies, web hosting services and professional development courses can also be deducted from a company’s taxable income. 

Taking full advantage of these deductions can be complex, so it’s always recommended that entrepreneurs seek advice from experienced tax professionals in order to navigate the process efficiently and effectively. With these tax tips for small business owners, it would be easier for you to decide what’s right for your business.

4. Updating Tax Payments Regularly

Another tax advice for small business one needs to know the importance of keeping up with quarterly tax payments, particularly for those with businesses or larger incomes. Whether you prefer to do your own taxes, hire a professional service, or use online programs, setting aside money for each quarter’s taxes is essential in order to handle a full load of your annual liability. 

Failure to set aside these funds can mean incurring financial penalties and burdening yourself with an overly large payment when the due date rolls around. Taking the necessary steps to ensure your quarterly tax payments are made on time will save you time, energy, and money in the end. With a reputable tax professional tax accountant, you can be sure to get the right understanding of how tax works.

5. Additional Taxes For Your Small Business

Running a small business has many unique benefits, but it also comes with certain obligations like taxes. Keeping up with additional small business taxes can be a daunting task and can take up much of the owner’s time. It is important for small business owners to understand that these additional taxes have deadlines that, if not met, can lead to hefty personal fines and/or business closure. 

Preparing for these taxes in advance helps keep current when due dates arrive; moreover, enlisting a knowledgeable accountant can further provide necessary insight and guidance in managing the process of taxation successfully. In the end, keeping up with taxes should be taken seriously as they ensure that businesses remain compliant and profitable.

Need a Reputable Tax Accountant For Your Business?

Want to learn more about tax tips for small businesses? John J. Rooney CPA, PA is your go-to expert if you are looking for a highly reputable certified public accountant to provide you with the best pointers and advice. We will make sure to help you take it to the next level, contact us now at,(407) 595-7148 or visit our website.