03 Nov 2026
When you’re running a business, tax details can get pushed aside while you take care of customers, employees and everything else that needs your attention. Then filing season comes around, and a missed expense or a bookkeeping mistake becomes something you have to sort out under a deadline.
I want you to feel comfortable asking questions before that happens. A conversation during the year gives us time to review your options, correct problems and make decisions with a clearer picture of how they’ll affect your taxes.
Here are several areas I encourage business owners to review.
Start with the basic details
An incorrect Social Security number or employer identification number can cause problems with your return. Wrong bank information can delay a refund or send it to the wrong account. Even when the tax calculations are right, these details still need attention.
Before filing, check names and identification numbers against the appropriate records. Confirm your bank’s routing number and your account number directly with your bank records, and make sure the account is open. If you’re doing calculations outside your tax software, review those carefully, too.
These checks may seem small, but they’re worth the few extra minutes.
Make sure your business structure still fits
The structure you chose when you started your business may deserve another look as your profits, ownership or goals change. I’d rather review that with you while we have time to plan than discover during tax preparation that a different approach might have helped.
Your legal structure and federal tax treatment are related, but they aren’t always the same thing. An LLC, for example, can receive different federal tax treatment depending on its ownership and any elections it makes. Forming an LLC doesn’t automatically mean your business is taxed as an S corporation.
When we look at your options, we need to consider your profits, how you pay yourself, the number of owners, payroll requirements, administrative costs and your plans for the business. An S corporation can offer benefits in the right circumstances, but it also brings responsibilities.
Let’s run the numbers and understand what a change would mean before deciding it’s the right move.
Separate startup costs from ongoing expenses
Starting a business often means spending money before you earn your first dollar. Researching the market, meeting potential suppliers and getting ready to open can all create costs that need different treatment from your regular operating expenses.
Generally, you may elect to deduct up to $5,000 of qualifying startup costs in the year your active business begins. That deduction is reduced dollar for dollar when qualifying startup costs exceed $50,000 and reaches zero at $55,000. Remaining qualifying costs are generally deducted over 180 months, beginning with the month the business starts operating.
Certain organizational costs, such as qualifying legal and accounting expenses to establish a corporation or partnership, have a separate deduction with similar limits. They shouldn’t simply be combined with startup costs under one $5,000 allowance.
Keep those early receipts and let me know what each expense was for and when the business opened. That helps us put the costs in the right categories from the beginning.
Capture the everyday deductions you qualify for
Small expenses can add up over a year. Business subscriptions, marketing materials, postage, bookkeeping fees and software are easy to overlook when they’re spread across different accounts or paid automatically.
Other expenses, including business insurance, vehicle use, travel and tax preparation, may also qualify. The amount you can deduct depends on the expense, its business purpose and the applicable rules.
A home office generally must meet regular and exclusive business-use requirements, with certain exceptions. Qualifying business meals are generally subject to a 50% deduction limit, and personal expenses don’t become deductible simply because you paid them from a business account.
I want you to claim the deductions you’re entitled to and have the records to support them. Save receipts, document business purposes and keep mileage records as you go. Reconstructing a year’s worth of activity in March is much harder than keeping up with it each month.
Report income in the right places
Your income records should tell a clear story of what the business earned. That means reconciling your books, reviewing information forms and understanding transactions that fall outside your normal customer payments.
Sales tax is one example. Sales tax imposed on the buyer and collected for the taxing authority generally isn’t business income. Taxes imposed on you as the seller can receive different treatment. You shouldn’t simply subtract every sales tax payment you made during the year from your revenue. The bookkeeping needs to reflect the type of tax involved.
Selling a business vehicle or piece of equipment also deserves attention. The tax result depends on the selling price, your adjusted tax basis and depreciation previously claimed. The amount deposited in your bank account isn’t necessarily the taxable gain, and the sale may need to be reported separately from ordinary sales revenue.
Give me your Forms 1099 and let me know about equipment sales or other unusual transactions. If a form appears incorrect, we can address the discrepancy instead of forcing your records to match an amount that may be wrong.
Review worker classification before problems develop
Hiring someone as an independent contractor involves more than deciding how you’d prefer to pay them. A contract or a Form 1099 doesn’t, by itself, establish that the person is a contractor.
For federal tax purposes, the IRS considers the business’s right to control the work, financial aspects of the arrangement and the overall relationship. We need to look at those facts together.
If you’re bringing someone on or changing an existing working arrangement, ask about classification early. Getting it wrong can lead to employment tax liabilities and penalties, and other federal or state requirements may also apply.
File on time, even if paying is difficult
An unexpected tax bill can feel overwhelming. Please don’t let concern about paying keep you from addressing the filing deadline.
Late-filing and late-payment penalties are separate, and the late-filing penalty is generally steeper for individual income tax returns. Filing on time and paying what you can helps limit additional costs while you work through the balance. An IRS payment plan may be an option.
If you need more time to prepare an accurate return, request the appropriate extension by the filing deadline. Sole proprietors generally use Form 4868 to extend their individual return. Other business returns have their own extension procedures.
An extension gives you additional time to file. It generally doesn’t give you additional time to pay, so we still need to estimate what you owe and plan for that payment.
Keep estimated taxes connected to your current income
Depending on how you earn income and how much tax is withheld, you may need to make estimated tax payments throughout the year. Waiting until you file can leave you with a large balance and potentially an underpayment penalty.
This is one reason current bookkeeping matters. If your profits increase, your payment plan may need attention. If business slows down or your circumstances change, we should review that, too.
I encourage you to set money aside regularly and keep payment deadlines on your calendar. Let me know when something changes so we can review your estimates while there’s still time to adjust.
Keep records that support your return
Good bookkeeping gives us reliable information to work with. It helps us identify deductions, prepare tax projections and understand what a business decision could mean for your return.
Use separate business bank accounts and keep personal spending out of your business records whenever possible. Retain receipts, invoices, mileage logs and other supporting documents in a consistent, accessible system.
A bank statement can show that you paid someone, but it may not explain what you purchased or why it was a business expense. Keeping that additional detail makes tax preparation easier and helps support your deductions if questions arise.
You don’t have to wait until your books are perfect to ask for help. If something has fallen behind or you aren’t sure how to record a transaction, we can start there.
Understand a deduction or credit before claiming it
A tax strategy that worked for another business owner may not apply to you. Eligibility can depend on your income, business structure, timing and documentation.
Before making a purchase or claiming a benefit based on something you heard online, let’s review the rules and your circumstances. Spending money solely for a deduction can leave you with less cash than you expected, even if it lowers your tax bill.
My goal is to help you understand your choices and use the opportunities available to you legally, with the records and reporting they require.
Make room for tax conversations throughout the year
You should feel comfortable reaching out before you hire someone, buy equipment, sell an asset or make another decision that could affect your taxes. Those conversations give us more room to work through your options.
At Frazier & Co., I want you to feel assured when your return is filed because you understand the numbers and know we’ve considered the strategies that fit your situation.
If you’d like help reviewing your business taxes, bookkeeping or plans for the coming year, contact me here: https://frazierandco.cpa/contact/. We can talk through where things stand and what deserves attention next.
© 2026
Tags: IRSSmall BusinessTax