A comprehensive checklist to help new business owners identify and implement essential tax planning strategies
Disclaimer: This checklist provides general guidance based on tax strategies relevant for 2025. Tax laws are subject to change, and individual circumstances vary. Always consult a qualified tax professional or CPA for personalized advice tailored to your business. This is not legal or financial advice.
The following checklist is organized into key categories to help new business owners identify and implement essential tax planning strategies. Use it as a reference to review your setup, track progress, and prepare for tax season.
Selecting the right entity impacts taxes, liability, and deductions. Re-evaluate annually as your business grows.
Assess entity type (e.g., sole proprietorship, LLC, S-Corp, C-Corp, partnership): Consider tax implications like self-employment taxes (15.3% on net earnings for sole proprietors) vs. potential savings with S-Corp (paying yourself a reasonable salary to reduce self-employment tax on distributions).
Action: Visit our Contact page and reach out to a NexTax.AI advisor to file for changes (e.g., S-Corp election via Form 2553) if beneficial.
Separate personal and business finances: Open dedicated business bank accounts and credit cards to avoid commingling, which simplifies deductions and IRS audits.
Action: Track all transactions separately from day one.
Know your tax types and deadlines to avoid penalties.
Identify applicable taxes: Include income tax (file annual returns like Schedule C for sole proprietors), self-employment tax (if net earnings ≥ $400), employment taxes (if hiring), and excise taxes (for certain industries).
Action: Use IRS Publication 583 for starting a business and Publication 509 for tax calendars.
Prepare for estimated taxes: Pay quarterly if expecting to owe ≥ $1,000 (individuals) or $500 (corporations) after withholdings; due April 15, June 15, Sept. 15, Jan. 15.
Action: Use Form 1040-ES to calculate and pay via EFTPS or IRS Direct Pay; Use the StartSmart App's Tax Compliance Calendar to set reminders to avoid underpayment penalties.
Reduce taxable income through eligible expenses and incentives.
Claim ordinary and necessary business expenses: Deduct rent, utilities, office supplies, insurance, professional fees, and home office costs (if qualifying).
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