Small-business taxes aren’t one-size-fits-all. Fortunately, most business owners’ needs boil down to knowing:
- Your business structure.
- What kinds of taxes you owe.
- When they’re due.
Regardless of your small-business tax knowledge, we recommend finding a certified public accountant (CPA) to work with. They can help ensure you’re filing the right forms and taking advantage of write-offs.
Most small businesses should also use accounting software to record business transactions. This is crucial to tracking deductible expenses.
Here’s a step-by-step guide to small-business taxes for beginners.
1. Confirm your business structure and tax classification
This is an important first step because it helps you determine which tax forms and deadlines apply to you.
There are five main business structures for tax purposes:
Don’t remember which structure you chose? LLCs, corporations and partnerships typically need to register with the state they’re located in. In that case, you should be able to confirm your business’s entity via your state department’s online portal.
If your business is a sole proprietorship, partnership or S corporation, the IRS taxes it as a pass-through entity. That means the corporate tax rate doesn’t apply. Instead, you report your business income on your individual tax returns. C corporations are not pass-through entities and must pay corporate tax rates.
Figuring out LLC business taxes is a little trickier. The IRS doesn’t have a fixed way of taxing them. Instead, it taxes single-member LLCs as sole proprietorships and multi-member LLCs as partnerships. That’s the default, unless you chose to be classified as a corporation when you started your business. This would have involved filling out specific forms. See our LLC vs. corporation explainer for more info on the pros and cons of each.
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2. Determine your business tax ID
Most businesses will file taxes using an employer identification number (EIN). These businesses include LLCs, partnerships, corporations and any operation with employees.
Typically, you can find your business tax ID on your EIN confirmation notice. You likely received it online or by mail. If you can’t locate that document, our article on tracking down your EIN has some additional options.
The IRS doesn’t require sole proprietors to get an EIN if they don’t have employees. In this case, they’d use their Social Security number instead.
3. Brush up on tax forms and filing deadlines
Most small businesses will need to file multiple types of taxes. It all depends on your business structure, location and whether you have employees.
Use this tool to find out the main types of taxes your business may be responsible for filing, along with when each is due. And keep in mind — though you file federal returns just once per year, you will likely need to make estimated tax payments on them quarterly.
4. Make note of your tax payment schedules
It’s important to remember that tax-filing due dates don’t always line up with tax payment deadlines. For example, businesses file their federal income tax returns once a year. But they need to make estimated tax payments on them quarterly.
Here’s a breakdown of tax types plus their filing deadlines and payment schedules.
| Filing deadline | Payment schedule | |
|---|---|---|
| Federal income tax | March 15, 2027 (S corporations, partnerships, multi-member LLCs). April 15, 2027 (C corporations, sole proprietors, single-member LLCs). | Quarterly. |
| State and local income tax | State tax deadlines usually line up with federal deadlines. Local income tax deadlines vary. | Depends on state and municipality. |
| Sales tax | Feb. 1, 2027 | Varies by state. |
| Employment tax | Form 940 is due on Feb. 1, 2027. Form 941 is due quarterly on April 30, July 31, Oct. 31 and Jan. 31. | Quarterly Form 940 payments if you owe more than $500 in a year. Monthly Form 941 payments if you owe less than $50,000 in a year. |
| Self-employment tax | April 15, 2027 | Quarterly. |
| Excise tax | Quarterly on April 30, July 31, Oct. 31 and Jan. 31. | Quarterly. |
5. Look up small-business tax deductions
Tax deductions lower your taxable income, potentially reducing the amount you owe. The IRS lets business owners write-off any expense that is “ordinary and necessary.” That can include things like auto expenses, travel expenses and property rent.
Check out our small-business tax deductions guide to find options for your business.
6. Find out if you’re eligible for small-business tax credits
Unlike tax deductions, tax credits don’t impact your business’s taxable income. Instead, you subtract them from your tax bill. To claim these credits, you’ll need to fill out specific tax forms. Our small-business tax credits guide can help you find out which ones apply to your business.
Are you overpaying in taxes?
NerdWallet Small Business helps you maximize tax savings and save up to $15,000 with our partner Xendoo's year-round tax services.
