Checklist for Small Businesses for Tax Preparation

1. Organize Your Financial Records

Ensure your financial records are up-to-date and accessible. This includes:

• Profit and Loss Statement (Income Statement)
• Balance Sheet
• General Ledger
• Bank and credit card statements
• Loan and lease documents
• Payroll summaries
• Receipts for expenses and purchases

💡Tip: Use accounting software like QuickBooks or Xero to streamline your recordkeeping.

2. Collect and Categorize Business Expenses

Gather receipts and categorize them properly to maximize deductions. Common expense categories:

• Rent or lease (office space, equipment)
• Utilities and internet- Office supplies- Marketing and advertising
• Professional services (legal, accounting)
• Travel and meals (with logs)- Insurance premiums
• Depreciation of business assets

Remember: Keep supporting documentation for at least 3 years.

3. Gather Tax Forms and Documents

• Ensure you have the necessary forms and data ready, including:
• Prior year tax returns
• EIN (Employer Identification Number)
• 1099s received and 1099s issued to contractors (Form 1099-NEC)
• W-2s for employees (if applicable)
• Payroll tax filings (Forms 940, 941, W-3)
• Sales tax filings and state/local returns

4. Review Estimated Tax Payments

If you’re self-employed or don’t withhold taxes through payroll, review your quarterly estimated payments:

• Ensure all Form 1040ES payments were made on time
• Reconcile total estimated taxes paid with actual liability

5. Reconcile Bank and Credit Card Accounts

Make sure your books match your financial institutions:

• Reconcile all bank accounts
• Reconcile all credit card statements
• Note any uncleared transactions or discrepancies

6. Confirm Ownership and Entity Structure

This can affect your tax filing requirements and deadlines:

• Sole Proprietorship
• Partnership
• LLC
• S-Corporation
• C-Corporation

Different structures require different forms (e.g., 1065, 1120-S, 1120).

7. Review Fixed Assets and Depreciation

• Update your asset register
• Review depreciation schedules
• Identify assets that were disposed, sold, or retired during the year

8. Track Employee and Contractor Payments

For compliance and reporting:

• Review payroll for W-2 filing accuracy
• Ensure contractor payments are over $600 and properly recorded on Form 1099-NEC
• Report fringe benefits or shareholder health insurance if applicable

9. Consider Tax Planning Opportunities

Review tax-saving strategies before filing:

• Retirement contributions (SEP IRA, Solo 401(k))
• Home office deduction
• Business use of vehicle
• Bonus depreciation and Section 179 expensing
• R&D credit or other industry-specific credits

10. Know Your Deadlines

Entity Type | Filing Deadline

S-Corps & Partnerships | March 17, 2025 (Form 1120-S/1065)

Individuals & C-Corps | April 15, 2025 (Form 1040/1120)

Extended Deadlines | Sept. 15 or Oct. 15, 2025

📌 File extensions on time to avoid penalties, but remember: extensions do not delay payment obligations.

Need Help Preparing?

At Effulgence LLC, we specialize in helping small businesses stay tax-ready and financially efficient. Whether you’re filing for a sole proprietorship or an S-Corp, we’ll help ensure accuracy, compliance, and savings.