Home > New Business? Here’s How to Handle Your First Tax Filing
5 Aug
Tax planning
New Business? Here’s How to Handle Your First Tax Filing
Starting a business is exciting. But tax season? Not so much. A surprising fact: Nearly 30% of small businesses make costly tax mistakes in their first year. Filing taxes for the first time can feel confusing—especially if you’re unsure where to begin. So, how can you handle your first small business tax filling without unnecessary stress?
The IRS treats each business type differently. That means your filing obligations depend on how your business is structured. A sole proprietorship, LLC, or corporation each has different requirements.
For example, sole proprietors report business income on a Schedule C with their personal return. On the other hand, corporations file separate returns. It’s essential to understand what applies to your setup.
If you’re unsure, this is where professional tax services for small business become helpful.
Choosing the Right Business Structure
Your business structure doesn’t just affect liability—it impacts taxes too. Each option (LLC, S corp, etc.) has pros and cons.
For example:
1. Sole proprietors pay self-employment tax.
2. S corporations might reduce those taxes but add extra paperwork.
Choosing the wrong one could cost more in the long run. Make sure you select wisely from the start.
Keeping Accurate Financial Records
Many new business owners think tax filing starts in April, but it actually begins the moment your business opens. The more organized your financial records are throughout the year, the easier it will be to file accurate returns and avoid costly audits or errors.
You should consistently track your income from sales and services, record all expenses like rent, software, and supplies, and store both paper and digital receipts. If you use a vehicle for business, logging your mileage is essential. Using accounting software or well-maintained spreadsheets makes this process smoother. Always back up your records to stay safe.
Knowing Your Tax Deadlines
Missing a tax deadline can lead to unnecessary penalties, which most small businesses can’t afford. Your filing due date depends on your business structure—many are due on either March 15 or April 15 each year.
Beyond the annual return, you may need to pay quarterly estimated taxes based on your expected income. If you have employees, payroll tax responsibilities also apply. Marking deadlines in advance and setting alerts can help ensure you stay compliant and avoid last-minute stress.
Common Deductions for New Businesses
Why pay more than you owe? Many first-time business owners miss deductions.
Examples include:
1. Office supplies
2. Business meals (50%)
3. Marketing costs
4. Startup expenses
5. Home office (if it qualifies)
Keeping receipts and tracking categories helps reduce your taxable income.
Filing Options: CPA vs. DIY
Can you file taxes yourself? Sure. But mistakes often happen.
A CPA knows the ins and outs of small business tax rules. They help avoid errors, save on taxes, and stay compliant.
While DIY tools seem cheaper upfront, they can lead to IRS notices and missed deductions. Consider your time, stress, and risk.
Why Tax Services for Small Business Matter
Running a business brings many challenges, and tax filing often adds to the stress. However, it doesn’t have to. With proper guidance, this task becomes more manageable. Hiring professional tax services for small business can take the guesswork out of filing and ensure everything is done correctly from the start.
These services do more than just submit forms. They help ensure accuracy, catch potential errors early, and offer tax planning strategies that can save money.
Most importantly, they provide peace of mind. When taxes are handled properly, you can focus on growing your business without worrying about unexpected tax issues.
Frequently Asked Questions
1. What forms do I need for my first business tax return?
The forms vary based on your business type. Sole proprietors typically file Schedule C with their personal return, while LLCs and corporations may use Form 1065 or 1120-S. A tax professional can ensure you’re using the correct one.
2. Can I file my business taxes with my personal return?
If you’re operating as a sole proprietor, your business taxes are filed with your personal return using Schedule C. Other entities like LLCs or corporations usually need separate business filings, depending on their IRS classification.
3. What if I made no income this year? Do I still file?
Yes, you should still file. Even without income, the IRS generally requires a return to be submitted, especially for registered businesses. Filing also keeps your records up-to-date and avoids potential penalties or compliance issues.
4. How do I pay estimated taxes?
You can pay estimated taxes by using IRS Form 1040-ES or submitting payments online through the IRS portal. These payments are due quarterly and help you stay current on your tax obligations throughout the year.
5. What records should I keep for tax time?
Keep all relevant records including receipts, sales and income logs, expense details, mileage logs, payroll records, and bank statements. Store them securely for at least three years to support any deductions or audit needs.
Final Thoughts
Starting a business is exciting, but taxes can quickly turn into a headache if you’re not prepared. The good news? Help is available. Reliable tax services for small business make your first small business tax filling less overwhelming and more accurate.
If you’re unsure where to begin or simply want to avoid rookie mistakes, connect with professionals who understand your needs.
Anu Agrawal CPA Inc. offers trusted support for first-time filers and growing businesses. With personalized attention and deep industry knowledge, you can feel confident your taxes are handled the right way.
