Small Business Tax Tips: A Year-Round Checklist

Good small business tax habits are simple: keep your records as you go, keep business and personal spending apart, set money aside for tax through the year, and know which forms and payments apply to you. This page is a short checklist. Items 1 to 6 quote the IRS, and items 7 and 8 are practical steps; the links lead to the guides that cover each topic in detail.

Billed publishes this page. The tax points are US federal rules quoted from irs.gov pages and publications, each with the date the IRS shows, opened on October 30, 2026. This is general information, not tax advice; ask your accountant how the rules apply to you.

The checklist (US)

1. Know which return you file

The IRS's 2025 Instructions for Schedule C (last reviewed or updated April 30, 2026) say: "Use Schedule C (Form 1040) to report income or (loss) from a business you operated or a profession you practiced as a sole proprietor." If your business isn't a sole proprietorship, ask your accountant which return applies. See the guide to small business tax filing.

2. Keep your records as you go

IRS Publication 583 (revised December 2024) says: "Supporting documents include sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks." On how long to keep them, the IRS page How long should I keep records? (last reviewed or updated June 30, 2026) says: "Generally, you must keep your records that support an item of income, deduction or credit shown on your tax return until the period of limitations for that tax return runs out." See how to organize business files.

3. Keep business and personal spending apart

IRS Publication 334 (2025) says: "If you have an expense that is partly for business and partly personal, separate the personal part from the business part. The personal part is generally not deductible." A separate business account and card make this easier. See business expense categories.

4. Know what counts as a business expense

Publication 334 also says: "To be deductible, a business expense must be both ordinary and necessary." For which expenses qualify, see the guide to business tax deductions and tax deductions for freelancers. For specific cases, see the home office tax deduction guide, what is tax depreciation and how to track mileage for business.

5. Plan for estimated tax

The IRS page Estimated taxes (last reviewed or updated September 25, 2026) says: "Individuals, including sole proprietors, partners, and S corporation shareholders, generally have to make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed." It adds: "If you don’t pay enough tax through withholding and estimated tax payments, you may have to pay a penalty." See what is quarterly estimated tax.

6. Understand self-employment tax

The IRS page Self-employment tax (last reviewed or updated June 27, 2026) says "The self-employment tax rate is 15.3%." It also says: "You must pay self-employment tax and file Schedule SE (Form 1040) if either of the following applies." The two cases it lists are "Your net earnings from self-employment (excluding church employee income) were $400 or more." and "You had church employee income of $108.28 or more." See what is self-employment tax.

7. Check the other forms and taxes that may apply

• Paying contractors: see what is a 1099 form.
• Sales tax: rules vary by state, so check your state's revenue department. See what is sales tax nexus.
• Your accounting method: see cash vs. accrual accounting.

8. Meet your accountant before year-end

Bring your records, a summary of income and expenses, and your estimated tax payments, and ask what else applies to your business. Questions about deductions, timing and business structure need their judgment, not a general checklist.

Worked example: setting tax money aside each month

The business and figures here are a sample, invented for this example, for tax year 2026. The estimate comes from the owner's accountant; it isn't an IRS figure or a rate to copy.

A freelance designer's accountant estimates the business will owe $9,600.00 in federal tax for 2026. The designer moves money into a separate tax savings account each month:

• Monthly set-aside: $9,600.00 ÷ 12 = $800.00.
• By the end of June: 6 × $800.00 = $4,800.00 saved.
• By the end of December: 12 × $800.00 = $9,600.00 saved.

Estimated tax payments have their own IRS due dates, so the designer's accountant matches the payments to those dates, using the money in this account. See what is quarterly estimated tax.

Where Billed fits

Billed's expense and receipt tracking page says to "Give every expense a category so your spending is already sorted when you file taxes or hand the year to your accountant," and that "Reports can be filtered by date range and exported for your accountant, bookkeeper or tax software." For sales tax on invoices, Billed's invoice software page says "Save your tax rates and settings once, and Billed calculates taxes automatically when you create invoices and estimates." For more on tracking expenses, see expense tracking for small business.

Related Articles

• Guide to Small Business Tax Filing
• Guide to Business Tax Deductions
• What Is Quarterly Estimated Tax?
• What Is Self-Employment Tax?
• Tax Deductions for Freelancers

Frequently Asked Questions

Do small businesses have to pay estimated tax?

In the US, the IRS says "Individuals, including sole proprietors, partners, and S corporation shareholders, generally have to make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed." Ask your accountant whether this applies to you.

What records should a small business keep for taxes?

IRS Publication 583 lists supporting documents including sales slips, paid bills, invoices, receipts, deposit slips and canceled checks. On how long to keep them, the IRS says: "Generally, you must keep your records that support an item of income, deduction or credit shown on your tax return until the period of limitations for that tax return runs out." Ask your accountant which period applies.

What is the self-employment tax rate?

The IRS says "The self-employment tax rate is 15.3%." See the page on self-employment tax for how it applies.

How much should I set aside for taxes?

That depends on your income, expenses and situation, so ask your accountant for an estimate. In the sample on this page, an accountant's estimate of $9,600.00 for 2026 means setting aside $800.00 a month.