Your Step-by-Step Guide to Business Tax Preparation
Chosen theme: Step-by-Step Guide to Business Tax Preparation. Welcome to a clear, confidence-building roadmap that demystifies filings, deadlines, and deductions. Follow each step, share your questions, and subscribe to get timely reminders, checklists, and fresh strategies tailored to growing businesses like yours.
Define Your Entity and Filing Obligations
Sole proprietors file Schedule C; partnerships file Form 1065; S corporations file 1120-S; C corporations file 1120. Each structure changes how profits are taxed and when forms are due. Comment with your current structure to get targeted next-step guidance.
Define Your Entity and Filing Obligations
Obtain an EIN, enroll in EFTPS, and open state withholding, unemployment, and sales tax accounts if applicable. A client once avoided penalties by registering before their first hire. Ask if your state requires a franchise tax or annual report.
Close your books monthly, not annually
Reconcile bank and credit cards, match deposits to invoices, and confirm payables. Generate a clean profit and loss with a balance sheet that truly balances. Finding errors in October beats discovering them in March when you are rushing to file.
Track deductible expenses with real documentation
Keep receipts for meals, travel, software, subscriptions, and equipment. Maintain mileage logs and vendor invoices. A digital folder per month speeds retrieval during review. Tell us your favorite receipt app so readers can compare tools that actually work in practice.
Separate business and personal lines, always
Use dedicated business bank accounts and cards. If you must pay personally, document reimbursements through an accountable plan. Clean separation protects deductions and strengthens credibility. Reply with your bank setup tips to help new owners avoid painful commingling mistakes.
Understand the Forms You Will File
Schedule C for sole proprietors, Form 1065 for partnerships, Form 1120-S for S corporations, and Form 1120 for C corporations. Owners receive K-1s from pass-throughs. Ask which form covers you, and we will share a tailored document gathering checklist.
Calculate Income, Deductions, and Credits
Recognize revenue and cost of goods sold correctly
Choose cash or accrual based on your size and needs, then stay consistent. Track inventory and direct costs to COGS for real margins. Share your revenue model and we will suggest mapping rules that simplify year-end tie-outs.
Capitalize and depreciate assets strategically
Use Section 179 and bonus depreciation when appropriate, and adopt a de minimis policy for small purchases. Maintain a fixed asset register with in-service dates. Tell us your equipment plans; we will discuss timing options that may improve cash flow.
Estimate Taxes and Make Timely Payments
Calculate estimates based on current-year projections or prior-year safe harbor rules. Individuals often target 90% of current or 100%–110% of prior-year tax. Share your growth expectations, and we will help choose a method that balances risk and cash needs.
Estimate Taxes and Make Timely Payments
Owners of S corporations should set reasonable compensation through payroll, then plan distributions. Partnerships allocate income via K-1s requiring personal estimates. Ask about aligning pay cycles and distributions so tax payments feel predictable rather than disruptive each quarter.
Review, File, and Plan the Next Year
Tie trial balance to the return, confirm 1099s issued, review officer compensation, and scan for missing receipts. Compare year-over-year ratios for anomalies. Share your checklist template and we will contribute our favorite catch-all items to strengthen it further.
Review, File, and Plan the Next Year
Use Form 7004 to extend 1120, 1120-S, and 1065, remembering extensions move the filing deadline, not the payment due date. E-file and pay via EFTPS. Tell us your target filing date so we can send reminders before critical milestones.
