When small business owners are busy overseeing day-to-day operations and focusing on the core functions of their businesses, they have little time left to think about taxes. Unfortunately, fiscal years tend to fly by when you’re having fun (running a business), and tax season always seems to be just around the corner. Tax planning, preparation, and filing can be time-intensive and labor-intensive, but they are necessary. 

With the correct systems (end-of-year checklists, accounting software, and standardized processes) in place, even the busiest business owners can find time to plan, prepare, and file their taxes. Consider the advice and simple steps outlined in our small business tax survival guide to place your business ahead of the 2024 tax curve.

 

Step 1: Gather Essential Financial Documents and Records

Accurate tax filing requires up-to-date records of your business’s income and expenses. Start by gathering key documents such as expense receipts, payroll records, and financial statements (income statement, balance sheet, and cash flow statement). Keeping these records organized throughout the year, ideally with monthly close processes, can significantly reduce the workload at year-end.

If your current system is disorganized—like storing receipts in a box—this step can feel daunting. We recommend using accounting software to automate tasks like receipt capture, expense categorization, and report generation. This not only streamlines tax preparation but ensures accuracy. For businesses needing additional support, outsourcing to accounting professionals can help set up efficient systems and handle tax planning, leaving you better prepared for year-end.

Step 2: Maximize Deductions

Maintaining thorough records also helps to ensure you take full advantage of available business deductions to reduce the total amount you owe the IRS. Some of the most common small business deductions include operating expenses like business travel and mileage, home office, and supplies. Some larger purchases like equipment, vehicles, or property might require capitalization and depreciation, enabling you to deduct a portion of the cost of these larger expenses over their useful lifetime.

Step 3: Know the 2024 Tax Deadlines

Tax deadlines are essential to saving money and keeping your business in compliance with tax laws and regulations. April 15, 2025, is the deadline for 2024 tax filing and payments. All 2024 tax return documents and payments will need to have been postmarked or submitted electronically by this date.

April 15th is tax day, but most businesses will have been paying quarterly estimates toward their 2024 tax bills throughout this year with quarterly deadlines that began on April 15, 2024 (first quarter taxes) with subsequent payment deadlines falling on June 15th (second quarter taxes), September 15th (third quarter taxes), and a final fourth quarter estimated tax payment deadline on January 15, 2025.

If you are not ready to file your taxes by April 15th, then you must file a request for an extension. This will buy you more time to file your taxes (until October), but you will still need to estimate and remit payment by the April deadline.

Missing tax payments, remitting payments late, or failing to file your tax return on time can cause you to incur costly tax penalties. Staying tax-ready throughout the year can help you save money by avoiding penalties.

Step 4: Understand Changes in Tax Laws for 2024

Each year, the IRS revises the tax codes, and this means that businesses need to keep up with the changes to ensure they properly account for their revenue and expenses in a compliant manner. Staying aware of changes maintains compliance and also ensures you can adjust your tax planning strategy to take full advantage of any available tax credits or new deductions.

For example, it’s important for business owners to be aware of recent changes to Section 174 which now requires that money spent on research and development be capitalized and amortized. These funds are no longer 100% deductible in the year they are spent.

A commercial tax expert can help you file taxes in accordance with current laws.

Step 5: Plan for Estimated Tax Payments

In most cases, businesses must pay quarterly estimates to the IRS if they expect to owe more than $500 total for the year (or face tax penalties). The total paid quarterly is based on the business’s anticipated adjusted gross income, taxable income, deductions, credits for the year, and taxes. Many businesses use historical financial data and forecasting to estimate their quarterly taxes.

Step 6: Consider Hiring a Tax Professional

Tax return filing in the United States is notoriously complex, and it’s even more challenging for business entities. With the tax code in flux every year, the need to follow the generally accepted accounting principles (GAAP) for compliance, and the myriad of bookkeeping and accounting software options available, professional assistance is invaluable to businesses. Not only can a tax professional ensure compliance and help you avoid paying extra in penalties, but they can also help you identify ways to improve the financial health of your business through increased operational efficiency, productivity, and maximize ROI.

Ready for a Stress-Free Tax Season?

Keeping your business tax-ready throughout the year will save you time, stress, and money. By keeping your back office prepared and organized, tax season will feel effortless. Implement the steps outlined in the survival guide above to create a standardized system that will help you navigate the upcoming 2024 tax season and many tax seasons to come as you continue leading your business toward a prosperous future.

Need Help Preparing for Tax Season?

Contact Accounting Freedom today to learn how our expert tax services can help your small business stay compliant and maximize deductions. Simplify your tax preparation now!