How to file business taxes: A complete guide for entrepreneurs
- Understanding your business tax obligations
- Tax documentation you will need
- How to file your business taxes
- Key tax deadlines at a glance
- Tax-filing best practices
- Streamline your tax preparation year-round
Key takeaways
- Your business structure determines your tax obligations and filing requirements, with different forms required for sole proprietorships, LLCs, corporations, and partnerships.
- Maintaining organized records and separating business from personal expenses throughout the year simplifies tax preparation and helps maximize deductions.
- Business tax deductions can include equipment, home office expenses, vehicle use, and charitable donations — track these expenses carefully to reduce tax liability.
- Automated expense management helps maintain clear audit trails and tax-compliant documentation, making it easier to identify deductions and prepare accurate returns.
Filing business taxes involves knowing your business structure, gathering the right documents, choosing the correct tax forms, and meeting IRS deadlines.
There are different rules and regulations for different types of businesses — different tax forms, and different due dates. Deductions can make a huge impact on your ultimate tax liability. And detailed tracking of your profits and expenses can affect your future success.
Understanding your business tax obligations
Your business structure will dictate your tax obligations. If you’re a sole proprietor, you’ll submit business taxes with your individual tax return on April 15. C corporations also file on April 15th, but they will use a different tax form.
If you’ve selected a different business structure, then you may submit taxes on March 15. Depending on your exact situation, you might need to file quarterly employment taxes.
Sole Proprietorship
Small business owners, such as sole proprietors, independent contractors, or LLCs where you’re the only owner-employee, will report business income on a Schedule C form along with your personal income tax return by April 15.
LLC
If you have multiple partners in your LLC, your limited liability company, you’ll use Form 1120 by March 15 to submit your tax information.
C Corporations
C corporations pay corporate taxes and use tax Forms 1120 and 941 to report Medicare taxes, social security, and income tax withholdings. The due date for C corp filing is April 15.
S Corporations
S corporations file Form 1120-S and will submit their tax filing by March 15.
Partnerships
Partnerships report earnings with tax Form 1065 and submit taxes by March 15.
Tax documentation you will need
Collect your tax documentation in advance and keep it in an organized location. You will need your:
- Employer Identification Number
- Bank account statements
- Business credit card account statements
- At least 1 year prior business or personal income tax return
Any relevant accounting records. There are many available software solutions to help you collect these throughout the year and keep them organized
Use automation tools like Ramp to automatically track, categorize, and store expense data throughout the year. With features like automated receipt matching and real-time expense reporting, you can ensure your tax records are organized and accurate when tax season arrives.
How to file your business taxes
There are four simple steps to filing your business taxes:
- Gather your tax documentation and financial records
- Figure out your tax deductions
- Use the right tax forms for your type of business
- File your taxes by the appropriate deadline
Get to know your tax documentation
Your Employer Identification Number, or EIN, is the unique code that identifies your business to the IRS. It’s like a social security number for your business.
Your bank account and credit card statements are how you can prove how much came in and went out over the year. It’s important to show what business income you had accurately, but it’s even more important to be able to show your business expenses. These are what you’ll use to help calculate your tax deductions. Many things that affect your cost of doing business can be deducted.
A previous year’s income tax return is important for you to prove that you’ve been keeping accurate business records and that you’ve been responsible for your tax liability. Without this evidence, the government may consider you negligent or try to prove that you’re avoiding paying your fair share of taxes. That could come with severe penalties.
You should also track payroll for any of your employees and keep those records for no less than 4 years. Report what you withheld for social security, Medicare taxes, federal taxes and, where applicable, state taxes.
Assess your tax deductions
Eligible tax deductions make a huge difference in what the government sees as your taxable income. You want to keep track of your business expenses and what you must spend on running your business.
Think about the assets you use to do business. Know when you acquired any equipment and address how much you use them. Keep in mind the expenses required to keep them running. That will allow you to depreciate them and report the correct gain or loss if you ever stop using them. Most of the value of equipment could be written off in the first year, but you can choose to get tax breaks over the life of the device, too.
Also, document where you conduct your business. You can get a tax deduction for your rent. Or if you work from a home you own, you should be able to show how much of the property is used for work. That could help contribute to a tax refund.
If you use a vehicle to do business, keep track of its mileage and its upkeep. And keep receipts for all business-related expenses, whether that’s for travel or for meals.
If you’re self-employed, you may pay self-employment tax in lieu of the social security tax that employees at larger companies pay.
Qualifying tax deductions will vary widely between different industries and can have a significant impact on your tax rate. Make sure to collect every bit to which you are entitled.4
Use the right tax forms
While selecting which IRS forms to use may seem daunting, it’s really a lot more straightforward. There’s the Schedule C, or tax forms 1065 or 1120.
- Schedule C – Just add a Schedule C form to your personal 1040 if you are an independent contractor, the sole proprietor of your business, or if your business is an LLC and you’re the only member.
- Form 1065 – Use tax form 1065 for Partnerships.
- Form 1120 – This is for limited liability companies, or LLCs, with multiple partners. C corporations will use tax forms 1120 and 941 for Medicare taxes, social security, and income tax withholdings. S corporations will use tax form 1120-S
File by the right deadline
While not as simple as just remembering April 15th for personal taxes, it’s not that much harder. April 15th is for personal taxes, sole proprietors, C corporations, and single-member LLCs. S corporations, Partnerships, and multi-member LLCs are due the 15th day of the 3rd month after the close of your tax year. This is generally March 15th.
Make sure to file on time or get an extension. The IRS will charge about $200 per business owner per month for taxes filed after the deadline. You can e-file directly to the IRS easily.5
Key tax deadlines at a glance
- January 31 – Send W-2s to employees and 1099s to contractors
- March 15 – S corporations, multi-member LLCs, and partnerships tax returns due date
- April 15 – single-member LLC, C corporations, sole proprietor, and personal tax returns due date
- Quarterly estimated tax payments – April 15, June 15, September 15, January 15
Tax-filing best practices
When it comes to filing your taxes, small business owners find it most helpful to keep their business and personal expenses separate from one another. Keeping accurate records will make things so much easier. This will save you time and remove a lot of the guesswork when it comes to filing your tax returns. You can accomplish this by having a separate business bank account and business credit card, and Ramp offers unique software solutions with automated expense tracking, receipt matching, and real-time reporting.
Another best practice is donating to charity if your company can afford it. These donations are deductible from your bottom line, making it more likely for you to get a tax refund while supporting your community. There is also a charitable tax credit, which will reduce the amount of taxes owed. Understanding your eligible deductions across the board is an excellent strategy.
A tax professional can help you make sense of your eligible deductions and assist with tax preparation. Providers like these will also help you make better decisions for your business going forward. They know the developing tax laws and can help steer your business in the right direction.
Special considerations for new businesses
Most professionals will agree that choosing the right business structure will greatly affect balancing your taxes with your personal liability.
Once you have decided whether your business will function as a sole proprietorship, partnership, C corporation, S corporation, or LLC, and you know your social security number, you can go to the IRS website to apply for an Employer Identification Number (EIN).
Once you have secured your EIN, Ramp can help you get a business credit card, which will help you keep your business finances separate. It’s also a good idea to open a second bank account to take payments and, if possible, look into a software solution from Ramp that will help you categorize all transactions going into and out of your account. Ramp can also help with expense management and receipt tracking.
Streamline your tax preparation year-round
Tax preparation becomes more efficient when managed throughout the year rather than just during tax season. Modern finance automation tools maintain accurate records continuously, reducing end-of-year tax preparation time and improving accuracy. Automated expense categorization eliminates manual sorting of transactions, with tools categorizing expenses according to IRS guidelines as they occur. Digital document management ensures tax compliance through automated systems that integrate seamlessly with your workflow.
This systematic approach maintains clear audit trails and separates reimbursable expenses from direct company spending, making it easier to identify tax-relevant transactions when needed.
The information provided in this article does not constitute accounting, legal, or financial advice and is for general informational purposes only. Please contact an accountant, attorney, or financial advisor to obtain advice with respect to your business.
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