Small Business Tax Essentials: A Complete Guide

Business Structure Matters

Your business structure affects how you're taxed:

Sole Proprietorship

• Income reported on Schedule C of your personal return
• Subject to self-employment tax

LLC (Limited Liability Company)

• Default: Taxed as sole proprietorship (single-member) or partnership (multi-member)
• Can elect S-Corp or C-Corp taxation

S-Corporation

• Pass-through taxation
• Can reduce self-employment taxes through reasonable salary
• Must file Form 1120-S

C-Corporation

• Separate tax entity
• Subject to corporate tax rates
• Dividends taxed again at shareholder level (double taxation)

Key Business Deductions

Ordinary and Necessary Expenses

• Rent and utilities
• Office supplies
• Professional services
• Insurance premiums

Vehicle Expenses

• Standard mileage rate OR actual expenses
• Keep detailed mileage logs

Home Office Deduction

• Exclusive and regular use requirement
• Simplified method: $5 per square foot (up to 300 sq ft)
• Regular method: Percentage of home expenses

Retirement Plan Contributions

• SEP-IRA, SIMPLE IRA, or Solo 401(k)
• Significant tax deduction opportunity

Quarterly Estimated Taxes

Business owners typically must pay estimated taxes quarterly:

• April 15
• June 15
• September 15
• January 15 (of the following year)

Underpayment can result in penalties.

Year-End Tax Planning

• Accelerate deductions into current year
• Defer income when appropriate
• Maximize retirement contributions
• Review equipment purchases (Section 179)

How We Help Small Businesses

Our business services include:

• Monthly bookkeeping
• Quarterly tax planning
• Annual business tax returns
• Payroll processing
• Strategic advisory services