Business owner reviewing receipts while preparing taxes
Business owner reviewing receipts while preparing taxes

Simplifying tax season for your business: 3 tips for this year and next

Filing your personal taxes can be complicated. However, filing taxes as a business owner can be even more complicated. Between keeping track of all your purchases from the past year and answering confusing questions on your Form 940, it’s easy to wonder how anyone can keep it all straight. Not to mention, it’s just. not. fun. In fact, 32% of taxpayers are dreading filing their taxes this year.1 But it doesn’t have to be that way. Whether you’re looking for additional information before April 15th or planning for a smoother tax season in 2025 (or you have already filed your taxes and are curious to learn more), here are three tips to help simplify the tax filing process for your business.

Hire the right accountant

Having the right business support network can make a big difference in your business. Supportive investors, engaged employees, and dedicated vendors and suppliers have an impact on your day-to-day workflow, but there is one essential professional relationship that is often overlooked: an accountant. Keep in mind, accountants are different from bookkeepers. Accountants have the financial knowledge required for bookkeeping, but also provide a strategic analysis of your business.2 While it may be simple enough to fill out a few forms, an accountant is going to have vast knowledge and a greater understanding of taxes, growth, and expenses. They can keep track of your assets, liabilities, income, and cashflow throughout the year, which makes filing your taxes easier. An accountant’s oversight will also help limit mistakes in filing, which means you’re less likely to face legal issues, tax penalties, and/or an audit from the IRS.

An accountant's expertise will help your business with financial analysis and planning, which means they’ll be a valuable asset year-round – not just during tax season. When you’re looking to hire an accountant, look for Certified Public Accountants, or CPAs, who are professionals that have met state licensing requirements. You can start by asking friends, family, and other business owners who their accountant is, and if they’d recommend them. If you can’t find the right match within your network, look for an accountant that will suit your individual business’s needs – experience working with businesses or other large clients is always a skill set worth looking for. The right accountant will help you in the short- and long-term, reduce financial stress, and help with overall business success. With all the responsibilities that fall on you as a business owner, letting a qualified expert do the work will free you up to focus on the things that matter most.

Find ways to reduce your tax liabilities

As a business owner, there are many tax write-offs, or tax deductions, you can subtract from your taxable income. You want to ensure you’re claiming all the deductions available to your business so you can pay a smaller bill. However, it’s important to remember to file personal and business taxes separately. You should have separate bank accounts for your business and personal spending, and keep track of your business cashflow separately from any personal accounts.

You can claim several tax deductions for your business, including the following.3

  • Advertising
  • Banking fees
  • Business meals
  • Car use
  • Contract labor
  • Depreciation
  • Education
  • Home office supplies
  • Insurance
  • Interest fees
  • Internet services
  • Legal fees
  • Moving expenses
  • Rent
  • Salaries and benefits
  • Travel expenses

If you have any questions or are looking for a comprehensive list, the IRS provides more information on their website.

Another thing to check is whether you’re correctly classifying your business. Deciding whether to classify your company as either a C Corporation, S Corporation, Limited Liability Partnership, Limited Liability Company, Single Member LLC, or Sole Proprietor will have a different effect on your taxes and the deductions you can make.4

Make sure you have all the records you need

Accurate and consistent record-keeping is essential for your business, especially when you’ll need to report all the expenses during tax season. The last thing you want to worry about is an audit from the IRS. If you don’t have an accountant, having basic accounting software like Intuit QuickBooks or FreshBooks is highly recommended. Keeping track of all your records can be cumbersome, but here a few of the basic records the IRS recommends you keep on file.5

  • Gross receipts
    • Deposit information, receipt books, invoices
  • Purchases
    • Proof of payment/electronic funds transferred
    • Credit card receipts
  • Expenses
    • Account statements
    • Canceled checks
  • Travel, entertainment, and gift expenses
  • Assets
    • Purchase price
    • Cost of improvements
    • Deductions for depreciation
    • How you used the asset
    • Selling price

Online banking tools can provide easy, convenient ways to keep track of your spending and cashflow. First Financial Bank offers f1RSTNAVIGATOR™, which can help you make informed financial decisions by more effectively monitoring, managing, and analyzing your accounts. f1RSTNAVIGATOR also integrates with the accounting software, QuickBooks. You can steer your business finances easily with access to customizable transaction reporting and all of your key online banking services, including eStatements, loans, ACH, wires, and bill payment. One recommendation is to take pictures of your receipts and store them in a digital folder on your phone in order to make filing easier when tax season rolls around. If you're not a f1RSTNAVIGATOR client, check with your banker on the capabilities within your online banking. Most online banking services allow you to categorize spending, track transactions, and more.

Once you have your records together and it’s time to actually fill out your tax forms, knowing which forms to fill out can be overwhelming. Form 720, 1040, 1120, 8832, SS-4, W-9…where do you begin? Quickbooks’s guide to small business tax forms provides a comprehensive list of tax forms and which ones you’ll need to file for your business. Take your time, do your research, and learn the ins-and-outs. And if you don’t feel confident, an accountant will always be the best bet to ensure you’re filing correctly and accurately.

When you’re vigilant throughout the year, tax season doesn’t have to be something to dread. Filing your taxes in the spring be a piece of cake. For tools and templates, check out our small business resources. And if you have any questions or concerns, you can always reach out to a small business banker for more information about maximizing your account benefits or optimizing online banking to organize your payables and receivables.