Small Business Tax Guide: What You Need to Know

Small Business Tax Guide

Running a small business comes with many tax responsibilities. Understanding them can save you money and keep you compliant.

Choosing the Right Business Structure

• Sole Proprietorship: Simplest structure, income reported on your personal return
• LLC: Flexible structure with liability protection
• S-Corporation: Can reduce self-employment taxes
• C-Corporation: Separate tax entity with its own rates

Key Business Deductions

• Business expenses: Office supplies, software, equipment
• Vehicle expenses: Mileage or actual expenses for business use
• Home office: Dedicated space used exclusively for business
• Employee salaries and benefits
• Professional services: Legal, accounting, consulting fees
• Business insurance premiums

Quarterly Estimated Taxes

If you expect to owe $1,000 or more in taxes, you must make quarterly estimated payments. Due dates are typically April 15, June 15, September 15, and January 15.

Common Mistakes to Avoid

1. Mixing personal and business finances
2. Missing quarterly payment deadlines
3. Failing to track all deductible expenses
4. Not keeping proper records and receipts
5. Ignoring state and local tax obligations

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