Running a small business comes with its fair share of challenges—especially around taxes. Proper planning and smart record-keeping can save you significant time, stress, and money when tax season rolls around. Below are our top ten tax tips designed for small business owners and entrepreneurs.

1. Keep Meticulous Records

Accurate, up‑to‑date financial records are your best defense during an audit and the foundation of every credible tax return. Use an easy accounting system or cloud‑based software to track income, expenses, invoices, receipts, and payroll.

2. Separate Personal and Business Finances

Mixing personal and business accounts creates confusion and makes reconciliation a headache. Open a dedicated business bank account and, if applicable, a separate business credit card to streamline tracking.

3. Understand Which Expenses Are Deductible

Familiarize yourself with common deductible expenses: office supplies, business travel, marketing costs, professional services, insurance premiums, and software subscriptions. Even small items like a new printer toner or industry‑specific magazines can add up.

4. Leverage Tax‑Advantaged Retirement Plans

Contributing to a SEP IRA, SIMPLE IRA, or Solo 401(k) can reduce your taxable income while securing your financial future. Depending on your revenue, you may be able to deduct significant contributions.

5. Claim the Home Office Deduction (If Eligible)

If you work from a dedicated space in your home, you may qualify for the home office deduction. Measure the square footage of your workspace, and you can choose between the simplified method (flat rate per square foot) or actual‑cost method (pro‑rated share of utilities, rent/mortgage, and repairs).

6. Track Mileage Religiously

Whether meeting clients or transporting goods, every business‑related mile counts. Use a mileage‑tracking app or maintain a handwritten log, and choose between the standard mileage rate or actual vehicle expenses.

7. Stay on Top of Estimated Tax Payments

As a small business owner, you’re generally required to pay quarterly estimated taxes. Missing deadlines can incur penalties and interest. Set up automatic transfers to avoid surprises.

8. Take Advantage of Tax Credits

Credits directly reduce the tax you owe and can sometimes even generate a refund. Look into the Research & Development Tax Credit, Work Opportunity Tax Credit (WOTC), and credits for energy‑efficient equipment.

9. Review Your Entity Structure Annually

Your choice of entity (sole proprietorship, LLC, S Corp, C Corp) impacts your tax rates, liability exposure, and available deductions. As your business grows, consult your accountant to see if restructuring could offer tax benefits.

10. Work with a Qualified Accountant

Professional guidance can pay for itself. An experienced tax professional will spot deductions you might miss, keep you compliant with changing regulations, and advise strategic planning to minimize liability.

Ready to Make Tax Season a Breeze?
At Francis Hutchinson Accountants, we specialize in small‑business tax strategy, bookkeeping, and year‑round support. Contact us today to schedule your free consultation and take control of your taxes!