Tax season often brings a rush of last-minute paperwork, misplaced receipts, and the lingering worry of an audit. But for business owners, staying ahead of tax preparation can make all the difference. The complexity of your business — whether you’re a sole proprietor, LLC, or corporation — will determine how much time you need to organize your records, file necessary forms, and maximize deductions.

Instead of scrambling at the deadline, a proactive approach ensures smoother filing, fewer errors, and potential tax savings. In this article, we’ll break down essential tax season tips to help you stay organized, avoid stress, and meet your deadlines with confidence.

Be aware of tax deadlines

Meeting tax deadlines is crucial to avoid penalties and interest. Here’s what you need to know when filing your 2024 tax return in 2025.

Federal tax deadlines

  • Traditional Tax Deadline: The standard deadline for filing individual and most business tax returns is April 15, 2025. Always check the IRS web page for updates, as deadlines can sometimes change.
  • State Tax Deadlines: State tax filing deadlines may differ from the federal deadline. Be sure to check your state’s tax agency website for the most up-to-date information.

Deadlines for business structures

Certain business entities have earlier deadlines. S corporations must file their tax returns using Form 1120-S by March 17, 2025 (since March 15 falls on a weekend). S corp owners report their share of the business’s income on their personal tax return (Form 1040), which is due by April 15, 2025.

Nonprofit organizations, on the other hand, do not file a traditional tax return. Instead, they must file Form 990 (informational return) by May 15, 2025. If a nonprofit generates taxable income, it must also file Form 990-T. Extensions are available, allowing nonprofits to file as late as November 17, 2025.

 Extensions

If you need more time to file, you can apply for an extension, which grants you an additional six months to submit your paperwork. However, an extension does not extend your tax payment deadline. Estimated taxes are still due by the original filing date — March 17, 2025, for S corps and April 15, 2025, for most other businesses and individuals. Late payments will result in IRS penalties and interest.

To request an extension, individuals must file Form 4868 while businesses use Form 7004. If approved, the new filing deadlines will be September 15, 2025, for S corps, October 15, 2025, for individuals and most businesses, and November 17, 2025, for nonprofits.

Gather all documentation and financial records

The best way to prepare for tax season is to always know where your documents are. Staying organized will make your life a lot easier when the crunch comes. Scan all your receipts and documents to save space and make everything much easier to find. Make sure you keep a copy of all these receipts in the cloud.

Don’t wait until the last minute to begin gathering statements, receipts and filling out your return. All of your financial reports should be managed monthly to avoid stress, confusion, and mistakes. Have a folder for everything, and you’ll simply be able to pull the information when the time comes.

Take advantage of possible deductions

Tax deductions, or write-offs, are expenses that you can deduct from taxable income. Maximizing these deductions can significantly lower your tax bill, but each expense must meet the IRS criteria to qualify as a legitimate deduction. Below is a list of common business tax deductions:

Business Expenses You Can Deduct

  • Business Use of Your Vehicle: If you use a vehicle for work, you can deduct mileage at the 2024 IRS standard mileage rate of 67 cents per mile. Alternatively, you can deduct actual vehicle expenses, such as fuel, maintenance, and depreciation.
  • Promotion and Advertising: Deduct costs related to marketing, including paid ads, website development, branding (logo design, business cards), social media promotions, and event sponsorships.
  • Business Meals: You can deduct 50% of meal costs if the meal is necessary, not extravagant, and a business owner or employee is present. Office snacks, company-wide parties, and team meals may be 100% deductible.
  • Business Insurance: This includes liability insurance, malpractice insurance, business interruption coverage, cyber liability protection, and any other required policies.
  • Contract Labor: If you pay an independent contractor $600 or more in a year, you must send them a Form 1099-NEC by January 31, 2025.
  • Education & Training: Courses, seminars, books, workshops, subscriptions to trade journals, and online training that improves your skills or is necessary for your business are deductible.
  • Legal & Professional Fees: Fees for accountants, attorneys, consultants, and tax professionals related to your business are deductible.
  • Home Office Expenses: If you use part of your home exclusively and regularly for business, you can deduct expenses using the simplified method ($5 per square foot, up to 300 sq. ft.) or the actual expense method (portion of mortgage, rent, utilities, and maintenance).
  • Rent for Business Property: Any rent paid for office space, warehouses, or other business-use property is deductible.
  • Salaries & Employee Benefits: Wages, health insurance, and other benefits for employees (excluding partners, LLC members, or sole proprietors) are deductible.
  • Telephone & Internet: The portion of phone and internet expenses used for business purposes can be deducted.
  • Travel Expenses: IRS-approved deductions include airfare, hotels, rental cars, rideshare, tolls, parking fees, baggage shipping, dry cleaning, business calls, and 50% of business-related meals during travel.

Deductions That Also Apply to Your Personal Tax Return

In addition to business deductions, small business owners may qualify for individual deductions related to:

  • Child & Dependent Care: Tax credits and deductions may apply for daycare, babysitting, or after-school programs.
  • Charitable Contributions: Businesses structured as C corporations can deduct charitable donations up to 10% of taxable income. Pass-through entities (sole proprietorships, LLCs, S-corps) claim charitable deductions on personal returns.
  • Health Care Expenses: Self-employed individuals may deduct health insurance premiums for themselves, their spouses, and dependents.
  • Retirement Contributions: Contributions to SEP IRAs, SIMPLE IRAs, Solo 401(k)s, or traditional 401(k)s may be deductible.

The importance of documentation

To maximize deductions and prepare for any audits, keep thorough records:

  • Save receipts for all expenses.
  • Digitally store invoices and receipts for easy access.
  • Keep detailed mileage logs for business-related vehicle use.
  • Maintain organized records of all deductible expenses in accounting software or spreadsheets.

By staying proactive with documentation and understanding eligible deductions, you can reduce your tax burden and ensure compliance with IRS regulations.

Set aside enough tax money

How much your business pays in taxes depends upon a variety of factors, including the obvious: the size of your business. However, there are free online calculators available that will give you an idea of what you’ll owe. 

Keep in mind that federal tax calculation isn’t the only tax preparation for business–you may have to pay some of these other taxes (depending on the nature of your business):

  • Franchise tax
  • Property tax
  • Sales tax
  • Excise taxes

A good rule of thumb to follow when saving for taxes during the year is the 30% rule. Set aside at least 30% (and up to 40%) of your business income to cover taxes. Tracking this sort of thing is important, and a great way to make sure it’s done is to hire an accountant or bookkeeper. These professionals will manage all aspects of your cash flow, and preparing for taxes is one of their specialties. 

It’s also important to calculate your estimated tax and pay that throughout the year.  Typically these payments are made in quarterly installments.  By doing this you spread the payments out over time and avoid having to pay a lump tax bill with your return.  Also if you file late, the payments have already been made and helps you avoid tax penalties when you complete the return.  

Optimize technology

Whether you hire a professional or do the bookkeeping yourself, it’s a best practice to use good accounting software to manage the finances. This software can help you track accounts payable and receivable, generate reports that give you a clear understanding of your company’s profitability, and assist in tax preparation for business. We recommend using Keeper Tax to automatically find business expenses and file your taxes for you.

For small businesses, an out of the box software should work fine, and won’t require a ton of customization. As your business grows and becomes more complex you’ll want to think about upgrading to a custom enterprise resource planning (or ERP) system. 

Utilize tax professionals

If you own a small business, you may not have the resources to be able to hire an in-house tax expert. If this is the case there are many accounting firms that specialize in guiding small businesses through the complex tax system of the IRS.  

Having a tax professional on hand during the year will help you avoid having to pull together complex information at the last minute while completing your return because they can give you guidance throughout the year for what you should be prepared for.  

Not only can they give you advice you can also hire them to complete your return on your behalf.  In these situations they will often give you or any accounting staff on your team a questionnaire and workbook of the sections of the return that are applicable to your business. You or your staff can provide the answers and the accounting firm will take your responses and complete the return on your behalf.  Like in any venture where you are not the expert, always consult with a tax professional before completing your taxes.   

In short 

Preparing business taxes shouldn’t be a hassle if you have your financial ducks in a row. By staying on top of your financial information all year long, you’ll not only be ready for tax season but also create a more functional business in every way. Use these tax tips to make sure that you’re never caught without vital information required by the IRS. 

Having an account with North One makes organizing all your business expenses easy. When tax time comes, you’ll save time and avoid mistakes by staying on top of your finances.