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Small Business Tax Tips: Essential Deductions To Maximize

December 14, 2024

A person sitting at a desk, reviewing a document titled "Federal Income Tax Deduction" with a calculator and a cup of coffee beside them.

If you are you scrambling to meet the upcoming tax deadline, we’ve got the small business tax tips you need to ease your anxiety!

Whether you’re a business owner, solopreneur, or side hustler, organizing your finances at the last minute can feel overwhelming.

Fortunately, with the right tools and tips, you can streamline the process, claim every deduction, and file with confidence. Let’s dive into some business tax time strategies to help you get organized fast and avoid missing out on savings.

Why Organization Matters for Business Expenses

Getting organized isn’t just about reducing stress—it’s essential for maximizing deductions. Many business owners miss out on deductible expenses by waiting until the last minute to file their taxes.

Every missed deduction increases your taxable income, which can leave you with a bigger tax bill. Staying organized ensures you take full advantage of every deduction you’re entitled to.

Must-Have Documents for Tax Filing

A business owner working on a keyboard, with office set up in the background, highlighting her work on "Estimated Tax Payments".

Before filing, gather the following essential financial documents:

  • Profit and Loss Statement (P&L): A summary of your income and expenses for the year. Even if you’re not using accounting software, you can create a P&L using a spreadsheet. You can grab our Profit & Loss Template and Dashboard (here) to quickly organize your finances.
  • Balance Sheet: If you run a corporation, you’ll likely need a balance sheet showing your company’s financial position.
  • Expense Records: Keep documentation of deductible business expenses, such as receipts. While you may not need them immediately, storing them ensures you’re ready in case of an audit.
  • Shared Expenses Documentation: For items like home office expenses, internet bills, or car usage, document the business-related portion to ensure you claim the appropriate deduction.

Best Tax Organization Tools for Small Business Owners

Depending on your style, here are a few ways to manage your financial organization:

  • QuickBooks Online: Automate your bookkeeping with this software that tracks income, expenses, and receipts in real time.
  • Spreadsheet Solutions: If you prefer a manual approach, our Profit & Loss Template and Dashboard (here) will help you create a P&L easily.

Pro Tip: Use these resources not only for tax time but to track finances throughout the year. This ensures you’ll never be scrambling last minute again.

Don’t Miss These Common Small Business Tax Deductions

Certain deductions are frequently overlooked, so be sure to include these:

  • Home Office Deduction: Deduct a portion of your rent, utilities, and internet based on how much of your home is used for business.
  • Car Expenses: Track business mileage or vehicle use for potential write-offs.
  • Travel Expenses: Include airfare, lodging, and meals if they relate to business trips. Ensure you document which parts are personal versus business expenses.

Should You File an Extension?

If you’re not ready to file by April 15th, consider filing an extension. This extends your filing deadline to October 15th, but it doesn’t extend your payment deadline. If you owe taxes, you must make an estimated payment by April 15th to avoid interest or late penalties.

Plan Ahead for Next Year’s Tax Season

Use this year as a learning experience to streamline your process for next year:

  • Hire a Tax Professional Early: Work with a tax expert starting in January to avoid the last-minute rush.
  • Organize Monthly: Create P&Ls throughout the year to stay on top of your finances and avoid a last-minute scramble.

Get Organized with the Ultimate Tax Bundle

Need help getting ready for tax season? Check out my Ultimate Getting Ready for Taxes Bundle.

It includes:

  • A P&L template to quickly organize your finances.
  • A checklist of often-overlooked deductions.
  • A walkthrough on how to file an extension if needed.

Final Thoughts

With preparation and the right tools, tax season doesn’t have to be stressful. Focus on organization, capture all your eligible deductions, and file on time—or file an extension if needed.

Ready to get organized? Grab the Ultimate Getting Ready for Taxes Bundle today and set yourself up for a smoother tax season.

Business Tax Time Tips to Get Organized Fast

This transcript is a direct representation of spoken words from the original video and has not been edited for content. However, it has been formatted for readability. Please excuse any grammatical errors, repetition, or informal language, as these are natural elements of conversational speech.

Are you scrambling for the upcoming tax deadline and need to get your finances organized fast? Well, that’s what we’re going to be talking about here today, so stick around.

I’m Jamie Trull, CPA and financial literacy coach, and if you are a business owner, solopreneur, or even if you have a side hustle, you are in the right place. We are going to be talking about some business tax time tips today that you don’t want to miss.

If you’re worried that you have way too much to do and way too little time to do it, don’t worry. I have the tools and tricks to help you today!

Why Organization Matters for Business Taxes

Let’s first jump into why organization matters when it comes to our business taxes. Organization is super important—especially for business owners—because we do not want to miss tax deductions. That’s typically what happens if we’re scrambling at the last minute. We run the risk of missing important deductions when we don’t organize ahead of time.

Missed deductions mean a higher taxable income—and a higher tax bill. We want to make sure we capture every deduction we’re entitled to.

Documents You’ll Need for Tax Time

A professional office setup with a tax advisor pointing at a chart related to payroll taxes while the client listens attentively.

Here’s what you need to get organized:

  • Profit & Loss Statement (P&L): This is a record of your income and expenses. Regardless of your entity type, the IRS will need to know what your total income and deductible expenses were to determine your taxable profit. If you don’t have a P&L yet, it’s not too late. You can create one now—and if you need a template to get started quickly, you can grab our Profit & Loss Template and Dashboard here.
  • Balance Sheet: If you operate as a corporation, you’ll likely need a balance sheet showing your company’s financial position.
  • Expense Records: Keep documentation for deductible expenses. While you may not need these receipts immediately, you’ll want to have them on hand in case the IRS ever asks for verification.

Pro Tip: If you’re short on time, prioritize capturing your deductions now. You can organize the documentation later—but don’t skip the deductions!

Tax Organization Tools: Software or Spreadsheets?

If you’re wondering what tools to use, there are several options depending on your style.

  • QuickBooks Online: This software allows you to track expenses, income, and even scan receipts for easy organization.
  • Spreadsheets: If you prefer a manual approach, you can still create a P&L using our template and dashboard. I highly recommend creating a P&L rather than just keeping a long list of expenses—it will be much more useful for you and your accountant.

Short on Time? Here’s What You Can Do Now

If you’re thinking, “Jamie, I don’t have time to get everything organized,” I’ve got you covered. Head over to jamietrull.com/taxtime and grab my Ultimate Getting Ready for Taxes Bundle.

This bundle has everything you need to:

  • Get your P&L ready.
  • Ensure you don’t miss any deductions.
  • Organize everything in an afternoon—ready to hand off to your accountant or file your taxes yourself.

Pro Tip: And good news: We’re running a special tax crunch sale right now. The bundle is one-third of the regular cost! However, if you’re watching this video in the future, the deal may have changed—so check it out soon.

Child's unearned income and tax saving strategies for family businesses leveraging a child’s taxable income.

If you have a family business and want to hire your kids, check out this article about Family Business Tax Strategies and the Kiddie Tax!

Don’t Miss These Often-Overlooked Deductions

Many business owners miss deductions related to shared expenses. These might include:

  • Home office deduction
  • Business use of your car
  • Portions of your cell phone and internet bill

Pro Tip: Additionally, travel expenses can often be deductible. Just make sure to properly document which expenses are for business versus personal use.

A Warning About Overspending for Deductions

One important reminder: Don’t spend money just to get a deduction. You don’t get all that money back! For example, if you spend $100 on something, you’ll only get about $25 back as a deduction (depending on your tax rate). You’re still out the remaining 75%, so only spend on things that truly help your business.

Filing an Extension

If you know you won’t meet the April 15th deadline, file an extension. It’s simple to do and gives you until October 15th to submit your return. But remember—an extension only extends the filing deadline, not the payment deadline. If you owe taxes, you’ll need to make an estimated payment by April 15th to avoid penalties.

There’s a walkthrough on how to file an extension for free included in my tax bundle (here)—so don’t wait until the last minute!

Plan Ahead for Next Year

If you’re looking for a tax professional this year, they’re likely already maxed out by now. But next year, plan to reach out early—ideally in January—to get on their schedule. This will make things easier for both you and your tax preparer.

Ready to Get Organized?

If you’re feeling overwhelmed, remember—my Ultimate Getting Ready for Taxes Bundle (here) can help you get organized quickly. It includes:

  • A P&L template to streamline your finances.
  • Checklists to ensure you don’t miss any deductions.
  • A guide on how to file an extension if needed.

Final Thoughts

Getting organized for tax time doesn’t have to be stressful. With the right tools, you can capture every deduction, file on time, and save yourself from headaches down the road.