Tax preparation looks like a once-a-year form-filling exercise, but for a business owner it is really the moment where a whole year of decisions gets priced. The entity you chose, how you paid yourself, what you bought and when, which states you worked in, all of it lands on the return. Good preparation makes sure every one of those decisions is reported correctly and that nothing you were entitled to is left behind.
Which returns we prepare
Most small business owners file at least two returns: one for the business and one for themselves. How they connect depends on the entity, and getting that connection right is where many self-prepared returns go wrong.
- Form 1040 with Schedule C: sole proprietors and single-member LLCs report business profit directly on the personal return, along with self-employment tax on Schedule SE.
- Form 1065: partnerships and multi-member LLCs file an informational return and issue a Schedule K-1 to each owner, who reports their share personally.
- Form 1120-S: S-Corporations file their own return and pass profit to owners on K-1s, alongside the W-2 wages owners pay themselves.
- Form 1120: C-Corporations pay tax at the entity level; owners are taxed again only on dividends or wages they receive.
- Schedule E: rental properties and pass-through income from K-1s, for owners with real estate or multiple entities.
If you are not sure which of these applies, or whether your current structure is still the right one, the LLC versus S-Corp comparison walks through the math, and business formation covers changing it.
Deadlines and extensions
For calendar-year businesses, partnership and S-Corporation returns are due on the 15th day of the third month (normally March 15) while individual and C-Corporation returns are due on the 15th day of the fourth month, normally April 15. When a deadline falls on a weekend or federal holiday, it moves to the next business day.
Form 7004 extends business returns and Form 4868 extends individual returns by six months. An extension is an extension to file, not to pay: any tax owed is still due by the original deadline, and interest and late-payment penalties run from that date. A late-filed return without an extension is far more expensive: the failure-to-file penalty is roughly ten times the failure-to-pay penalty each month. The fall deadline guide covers the extended dates in detail.
Filing on time and paying what you can stops the larger penalty immediately. A payment plan for the balance is almost always cheaper than filing late, and IRS resolution can set one up.
Where the savings actually come from
Software asks you questions; an accountant asks the ones you did not know to answer. The deductions small businesses miss most often are not exotic: they are ordinary items nobody prompted for. The deductions guide lists the usual suspects, but these are the ones we check on every return:
- The Qualified Business Income deduction for pass-through owners, which can be worth up to 20% of eligible profit and is easy to under-claim near the income thresholds.
- Retirement contributions: SEP-IRA and Solo 401(k) employer contributions can often be made right up to the extended due date.
- Self-employed health insurance, home office, vehicle use, and the business share of phone and internet.
- Equipment and improvements expensed through Section 179 or bonus depreciation rather than depreciated over many years.
- State pass-through entity tax elections, which many states offer to let owners deduct state tax at the entity level.
Multi-state returns
Remote work and online sales mean many small businesses now owe returns in states they have never visited. Owners can be residents of one state, nonresidents in another, and part-year residents of a third in the same year. Business income may need to be apportioned across states based on sales, payroll, or property. We prepare resident, nonresident, and part-year returns together so the credits for taxes paid to other states actually line up: the most common source of double taxation we fix on returns prepared elsewhere.
How we prepare a return
- 1Intake: you upload W-2s, 1099s, K-1s, bank and card statements, and last year's return through a secure portal, using a checklist built around your situation.
- 2Books first: for business returns we start from reconciled books. If they are not ready, bookkeeping cleanup comes before the return, not after.
- 3Preparation and review: every return is prepared and then reviewed by an experienced accountant, with workpapers that tie each number back to its source.
- 4Walkthrough: a short call where we explain the result, what changed from last year, and what to do differently this year.
- 5E-file and next year: we e-file, deliver a PDF copy, and set up estimated payment vouchers so next year starts on plan.
Fixing a prior-year return
If a past return missed income, claimed something it should not have, or left deductions on the table, it can usually be amended: Form 1040-X for individuals, and the corresponding amended forms for businesses. Refund claims generally must be made within three years of filing the original return or two years of paying the tax, whichever is later. Amending proactively is almost always better than waiting for the IRS to find the error.
What to have ready
- Last year's federal and state returns, and any IRS or state notices received during the year.
- Income forms: W-2s, 1099-NEC, 1099-K, 1099-INT and 1099-DIV, and K-1s from partnerships, S-Corps, or trusts.
- Year-end books or bank and card statements, plus a list of major purchases and their dates.
- Records of estimated tax payments, retirement contributions, and health insurance premiums.
Preparation versus planning
Tax preparation records what already happened. By the time you are filing, most of the levers that change the number have already passed. That is why our preparation clients usually pair it with year-round tax planning and quarterly estimated payments, so the return in April confirms a plan rather than delivering a surprise. Fees are fixed and quoted before work begins; what accountants typically charge explains the ranges.