Small Business Tax Return Preparation & Advisory

Comprehensive tax preparation for LLCs, S-Corps, partnerships, and sole proprietors. From entity selection to estimated tax planning to annual filing, we help small business owners stay compliant and keep more of what they earn.

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What Is Business Tax Return Preparation?

Business tax preparation involves preparing and filing the required federal and state tax returns for your business entity. The specific forms depend on your entity type — sole proprietors file Schedule C with their individual return, while LLCs, S-Corps, and partnerships file separate business returns (Forms 1065, 1120S, or 1120) with income flowing through to the owners' individual returns.

At TaxWise LLC, we understand that small business owners wear many hats. You shouldn't have to be a tax expert on top of everything else. We handle the tax side so you can focus on running your business. Our approach covers both compliance — filing accurate returns on time — and strategy — structuring your business and transactions to minimize tax within the rules.

We serve small businesses across a range of industries and stages: new ventures choosing their entity type, established businesses managing quarterly estimates, and growing companies navigating hiring, equipment purchases, and multi-state operations. We speak plain English, answer your questions directly, and make sure you understand your tax picture.

Who Needs Business Tax Preparation?

Sole Proprietors

Independent contractors, freelancers, gig workers, and single-owner businesses reporting income and expenses on Schedule C of your individual Form 1040.

Single-Member LLCs

Disregarded entities for tax purposes. Your business income flows to your individual return, but you may benefit from an S-Corp election as your income grows.

Multi-Member LLCs & Partnerships

File Form 1065, with K-1s issued to each partner or member. We handle allocations, basis tracking, and guaranteed payment calculations.

S-Corporations

File Form 1120S with K-1s to shareholders. We manage reasonable compensation requirements, distribution planning, and basis calculations.

New Business Owners

Just getting started? We help you choose the right entity type, register for an EIN, understand your filing obligations, and set up a recordkeeping system.

Multi-State Businesses

Operating or selling in multiple states. We determine where you have nexus, which state returns are required, and how to apportion income.

When to Consult a CPA for Your Business

These milestones and situations may change your tax obligations or create opportunities for tax savings.

Starting a new business or side venture

Choosing the right entity type (LLC, S-Corp, sole proprietorship) affects your tax rate, liability exposure, and administrative burden. Early planning can save thousands in unnecessary taxes.

Your business income is growing significantly

As your profit increases, an S-Corp election may reduce self-employment tax. We can run projections to determine the break-even point where it makes sense for your situation.

You're hiring your first employee

Payroll introduces federal and state withholding, unemployment taxes, and quarterly payroll filings. Worker classification (employee vs. independent contractor) must be determined correctly.

You're buying equipment or vehicles

Section 179 expensing and bonus depreciation can accelerate deductions for qualified purchases. We help time major purchases for maximum tax benefit.

You received an IRS or state notice

Business tax notices — sales tax audits, payroll discrepancies, or income matching notices — deserve prompt, professional response to avoid escalating penalties.

You're considering selling or closing the business

The tax treatment of a business sale depends heavily on how the deal is structured (asset sale vs. stock/interest sale). Advance planning can materially change the after-tax outcome.

Documents to Gather

Having these records organized helps us prepare your business return accurately and identify potential deductions you may have missed.

How We Prepare Your Business Return

1

Discovery & Entity Review

We review your entity structure, ownership, and any changes from the prior year. If you're a new client, we examine prior returns for missed opportunities and ensure your entity structure still fits your goals.

2

Financial Review & Reconciliation

We review your income, expenses, asset purchases, and payroll. We reconcile your books to your tax return workpapers, identify any discrepancies, and categorize transactions for optimal tax treatment.

3

Tax Return Preparation

We prepare your business return (Schedule C, Form 1065, or Form 1120S), K-1s, and related state returns. We identify deductions, credits, and elections that apply to your situation, including Section 179, bonus depreciation, and the QBI deduction.

4

Review, Filing & Planning

We walk you through the return, explain key figures, and answer your questions. After e-filing, we discuss estimated tax payments for the coming year and any tax-saving strategies to consider before year-end.

Common Business Tax Mistakes

Mistakes That Can Cost Your Business

  • Commingling personal and business finances — Running business expenses through personal accounts (or vice versa) creates a bookkeeping mess, weakens liability protection, and may cause the IRS to disallow legitimate deductions.
  • Misclassifying employees as contractors — The IRS and states use specific tests to determine worker status. Misclassifying an employee as a 1099 contractor can trigger back payroll taxes, penalties, and interest.
  • Missing estimated tax payments — If you owe $1,000 or more, skipping quarterly estimates results in underpayment penalties. We calculate safe-harbor estimates so you avoid surprises.
  • Failing to track vehicle and home office use — Without contemporaneous mileage logs and home office measurements, you may lose valuable deductions under audit. We recommend simple tracking systems from day one.
  • Not filing all required state returns — Selling into another state, having remote employees, or holding property in another state can create filing obligations. Nexus rules vary by state and activity.
  • Ignoring retirement plan options — SEP IRAs, SIMPLE IRAs, and Solo 401(k)s offer significant tax-deferred savings for business owners. Contributing before year-end can meaningfully reduce your current-year tax bill.

Frequently Asked Questions

LLC vs S-Corp — which is better for tax purposes?
The answer depends on your income level, how you take money out of the business, and your growth plans. Generally, an S-Corp election may reduce self-employment tax once your net profit is large enough to support a reasonable salary and distributions. However, S-Corps involve more administrative requirements (payroll, separate return). There is no one-size-fits-all answer — we can run the numbers for your specific situation.
What business expenses can I deduct?
Generally, you may deduct ordinary and necessary expenses paid or incurred during the tax year in carrying on your trade or business. This includes rent, supplies, professional fees, advertising, travel, vehicle expenses, home office, equipment, and employee wages. Some expenses — like business meals — are subject to specific limitations. We review your expenses to maximize deductions while staying compliant.
How do estimated taxes work for my business?
If you expect to owe $1,000 or more in tax for the year, you generally need to make quarterly estimated tax payments (due mid-April, June, September, and January). These cover both income tax and self-employment tax. We calculate your estimated payments based on your projected income and can help you set up a payment schedule through EFTPS.
When do I need to register for payroll?
You generally need to register for payroll when you hire your first W-2 employee (not a 1099 contractor). This involves obtaining an EIN (if you don't already have one), registering with your state's employment department, setting up federal and state tax withholding, and filing quarterly payroll tax returns. We can guide you through the setup and ongoing compliance.
Do I need a separate business bank account?
Yes, we strongly recommend maintaining a separate business bank account and credit card for all business transactions. Commingling personal and business finances can create liability issues (piercing the corporate veil), complicate your bookkeeping, and draw IRS scrutiny. For LLCs and corporations, separation is essential to maintaining liability protection.

Ready to Get Your Business Taxes in Order?

Schedule a consultation with a CPA who works with small businesses every day. We'll discuss your entity, your goals, and how to minimize your tax burden.

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IRS Circular 230 Disclosure: Any tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of avoiding federal tax penalties or promoting, marketing, or recommending any transaction or matter addressed herein.

Important: Do not send sensitive personal information such as Social Security numbers or banking details through unsecured forms or email. Use our secure client portal for document uploads. The information on this page is for general informational purposes only and does not constitute professional tax advice. Every taxpayer's situation is unique — please consult with a CPA regarding your specific facts and circumstances.