How to File Small Business Taxes

If you’re new to filing taxes as a small business owner, you might feel a little intimidated by the process. You may find yourself asking questions like: How can I be sure I’m using the correct forms? How do I prepare my business financial statements for tax season? What deductions am I eligible for? What if I need to file an extension?

If you’re asking these questions, you aren’t alone. This guide covers all the answers to those common questions and tips on how to file small business taxes.

What are business taxes? 

Let’s start with the basics. What are the different types of  taxes you may need to pay as a small business owner? 

At the most basic level, you need to file your federal tax return each year through the IRS to figure out your tax liability. Just like a personal income tax return, small businesses also have a tax obligation to the federal government and the state (depending on where you live). In some cases, you’ll also need to pay local taxes.

A business tax return documents your business income and business tax deductions. To file your taxes with the federal government, you’ll need an Employer Identification Number (EIN). Your EIN serves as your federal tax ID number.

As a business, you might have to pay taxes that include:

• Self-employment tax: Social Security and Medicare taxes for independent contractors and self-employed individuals. 
• Estimated tax: Quarterly federal and state tax payments made throughout the year. 
• Sales tax: Taxes collected from taxable goods and services. 
• Property tax: Taxes paid on the value of a business property. 
• Excise tax: Taxes that are imposed on specific goods or services. 
• Employment taxes: Social Security, Medicare, federal income tax withholding, and federal unemployment tax (FUTA).

Small business tax deduction examples 

For those wondering how to file small business federal taxes and lower your tax bill, itemizing your expenses can help you do just that. 

Small businesses are allowed “ordinary and necessary” deductions that can help reduce your taxable income. A lower taxable income means you and your business may owe less money during the tax year. 

Some examples of small business tax deductions include: 

• Business meals
• Work travel expenses
• Home office costs
• Business insurance
• Work-related car use
• Retirement contributions
• Rent
• Office supplies and expenses 
• Business interest expenses
• Startup expenses 

These are just a few of the potential small business tax deductions that might apply to your business. A tax preparer may be able to help you find even more. This is why it’s important to keep a detailed record of all of your business expenses to maximize your tax deductions and reduce your taxable income. 

How to itemize business expenses

Itemizing your expenses can help small businesses file taxes and lower their tax bill. Because small businesses need to detail their expenses to claim them with the IRS, record-keeping is crucial. You can itemize business expenses in a few steps:

1. Note the amount paid for every business expense and the payment method. 
2. Hold onto receipts from business expenses for accurate record-keeping and IRS verification.
3. Organize purchases by date. 
4. Write out why each purchase counts as a business expense or qualifies for a certain deduction.

A small business stands a better chance of receiving a tax deduction with detailed records. Additionally, if the IRS audits a business’s write-offs, these records will help avoid penalties and fines.

7 steps to filing small business taxes 

Ready to conquer small business tax filing this tax season? Here’s how to file small business taxes in seven easy steps.

1. Gather your records for tax filing 

As mentioned above, detailed records of business expenses you paid throughout the year can help lower your taxable income. You’ll need to get all of your company records together to report your business income and qualified business expenses.

This means gathering supporting documents related to payroll, sales, purchases, and other qualified business expenses. Some of the small business documents you should gather when preparing your taxes include:

• Invoices
• Paid and outstanding bills
• Canceled checks
• Deposit slips 
• Sales slips 
• Cash register tapes
• Credit card statements 
• Bank account statements 
• Employment tax records
• Year end payroll reports 

Pro tip: Utilizing tax preparation or bookkeeping software to track business expenses and transactions throughout the year is much easier than trying to figure it all out at the end of the fiscal year.

2. Know what IRS forms you need to file 

The types of IRS forms you’ll need to  file for your small business taxes depend on your business structure. Here are the small business tax forms you may need to file your return: 

• Sole proprietorship: If you’re a sole proprietor, you’ll need to file a Schedule C (Profit & Loss From Business) as part of your  personal tax return Form 1040. 
• Partnerships: Partnerships file their business tax returns using Form 1065.   The partnership’s Form 1065 filing produces a  Schedule K-1, Partner’s Share of Income, Tax Credits, and Deductions  for each partner. The partners then utilize Schedule K-1 to complete their individual tax returns.
• Corporations: If you’re a corporation, you must use the corporate tax return Form 1120 (or Form 1120S if you’re in an S-Corporation structure).
• Limited liability companies (LLCs): LLCs use a variety of forms, depending on how the business elects to be taxed.Typically, most multi-member LLCs default to being treated as a partnership. If the LLC is a single-member LLC, then the entity is considered to be disregarded for federal purposes. What this means is that the owner will file a Schedule C to report the business income and losses on Form 1040. However, if you want your business taxed as a corporation (C Corporation), then you use Form 1120. If you want your LLC to elect to be treated as an S Corporation, then the LLC must timely elect to be treated as an S Corporation using Form 2553, Election by a Small Business Corporation. 

You can find the forms needed to file small business taxes on the IRS website. 

3. Fill out your small business tax forms 

When filling out your small business tax forms, it’s important to carefully follow each step and provide accurate information. If you’re filing using Schedule C, the form is a bit less complex, as it is only two pages. 

Forms 1065, Form 1120, and Form 1120S are more extensive and may require a bit more time to fill out. Be prepared with all of the required information and make sure to have your supporting documents handy before filling out your form. 

For a typical taxpayer, filling out tax forms can be challenging. To ensure you don’t miss any required information, use accounting software and other resources to stay organized.

4. Know the small business tax deadlines 

During some tax years, the due date for sending in your personal income tax return or small business tax return falls on either a holiday or a weekend. If that occurs, the new tax deadline is the next business day.

You already know how important it is to stay organized as a business owner. You need to manage invoices, inventory, a website, payroll, employees, and everything else. Being organized when it comes to the due date of your business taxes is essential.

Here are the key tax filing dates and deadlines you’ll want to be aware of in 2025: 

• March 16, 2026: For partnerships and multiple-member LLCs that file a Form 1065 with the federal government and provide a Schedule K-1 to partners and S Corps filing Form 1120-S.
• April 15, 2026: For sole proprietors or single-member LLCs filing Schedule C with Form 1040.
• April 15, 2026: Corporations with a fiscal year that ends on December 31 submitting Form 1120.

Corporations with a fiscal year that ends on a date other than December 31 have a tax return deadline of the fifteenth day of the fourth month after the end of the tax year—or April 15, 2026.

Our small business tax prep checklist can help you keep track of important filing dates. 

5. File for a business tax extension if needed 

Need to push back your deadline? You can file for a business tax extension to send it in later with Form 7004. This form grants a six month extension to file, but won’t provide extra time to pay. Make sure you get the extension filed and pay any tax due before the deadline so you won’t have to pay any penalties. 

The tax extension deadlines for small businesses in 2026 are: 

• March 16, 2026: Deadline for partnerships, S corporations
• April 15, 2026: Deadline for sole proprietors (extension form is Form 4868 for individual tax returns), C corporations

If you don’t file an extension and miss your tax filing deadline, you may face the Failure to File Penalty. This is a penalty you must pay if you fail to file your taxes on time. The penalty is 5% of your unpaid taxes for each month or part of the month that your small business tax return is late. 

Pro tip: State tax and extension deadlines vary by state. Research your state and local tax guidelines and due dates early in the filing process. 

6. File small business taxes 

E-filing is easier and faster than mailing, and you can get your tax refund faster too. The IRS offers many different filing options for small businesses to choose from. 

Remember, if you’re concerned about filing your taxes correctly, it’s worth the expense to enlist the help of a licensed tax professional. With the help of a pro, you can ensure that you’re: 

• Being compliant with tax laws 
• Making the appropriate tax payments
• Understanding your tax refund

7. Stay on top of small business tax payments  

Many businesses are required to make estimated tax payments throughout the year. If you’re a sole proprietor, partnership, or S corporation and expect to owe over $1,000 on your  tax return, or are a corporation and expect to owe over $500 or more when the return is filed, you are responsible for making estimated tax payments each quarter. 

You can pay your estimated taxes on the IRS website, from your mobile device using the IRS2Go app, or by mailing in Form 1040-ES. Not making estimated tax payments or underpaying your taxes could result in a penalty from the IRS. 

You are still required to file an annual small business tax return and calculate your tax liability for the year, even after paying quarterly taxes. If you didn’t pay enough through your quarterly tax payments, you’ll be responsible for paying the remainder when you file your tax return. 

Though you may still owe money at the end of the year, making quarterly small business tax payments can help lower your end-of-year tax bill significantly. 

Make filing small business taxes easy with QuickBooks 

Still confused about how to file small business taxes? Why not rely on software that can help you make the most of your time?

Although it can be confusing to navigate on your own, QuickBooks is here to help. With intuitive software that delivers reports, earnings, and other helpful data, you can have peace of mind that tax season won’t leave you confused and concerned.

To face your business taxes with total confidence, rely on virtual bookkeeping services like QuickBooks Live, a comprehensive digital bookkeeping experience that makes reporting and filing taxes a breeze. A customized setup helps you personalize your experience and guides you through connecting to your bank. Your online bookkeeper will provide you with key reports to help you make solid financial decisions.

With TurboTax Expert Assist for Business, get unlimited expert help while you do your taxes, or let a tax expert file completely for you, start to finish. Get direct access to small business tax experts who are up to date with the latest federal, state and local taxes. Small business owners get access to unlimited, year-round advice and answers at no extra cost, maximize credits and deductions, and a 100% Accurate, Expert Approved guarantee.