<Title>First-Time Business Owner Tax Prep: Essential Checklist</Title>

If you're a first-time business owner, we understand how taxes can feel overwhelming, especially when juggling a side hustle or a full-time venture. Before you know it, tax season is here. But don't worry — we're here to help guide you through the process with practical steps to prepare and bust some common myths that could catch you off guard.

Know Which Forms You’ll Need

Understanding the tax forms specific to your business structure is crucial. For example, sole proprietors will use a Schedule C, while LLCs, partnerships, S corps, and C corps require forms like Form 1065/K-1, Form 1120-S/K-1, and Form 1120, respectively. Don't get caught by the myth that “LLCs don’t pay taxes.” The IRS designates LLCs based on their structure, so knowing your form requirements is essential.

Get Your Business Records in Order

Start by organizing your business documentation, such as bank statements, issued and received invoices, receipts, payroll records, mileage logs, and 1099s for contractors paid $600 or more. A common misconception is that you can use a personal bank account and separate finances later. Instead, keep business and personal finances distinct from the start. This practice not only simplifies accounting but also helps you avoid unnecessary headaches during tax season.

Organize Your Deductible Expenses

Identify and organize potential deductions, including office rent or home office expenses, software and tools, marketing, business meals (50% deductible), travel, and professional services. A frequent myth is that “everything spent for business is deductible.” However, not all expenses are fully deductible — some are only partially deductible or not deductible at all. Familiarize yourself with these guidelines to optimize your deductions.

Know Your Tax Deadlines

Mark vital tax-related dates on your calendar to avoid penalties. S corps and partnerships have deadlines on March 15, while C corps and sole proprietors are due by April 15. Remember quarterly estimated tax payments are due in April, June, September, and January. Being proactive with these dates ensures you avoid unnecessary penalties.

Handling taxes as a new business owner doesn't need to be overwhelming. With the right documentation, organized records, and an understanding of deadlines, you'll be prepared to file accurately and retain more of your hard-earned income. Start organizing today, and reach out to us for personalized guidance.