Tax Prep Checklist for Small Business Baddies

It’s officially December and while April might seem like a far away dream… preparing your small business for tax season starts right meow.

(We’re sorry. Try not to barf after hearing the words “tax season.” We promise we’re only bringing it up because we love you and don’t want you to be in a full panic later.)

If you want to know how in the funk to prepare for business taxes, this tax preparation checklist for small business owners was made just for you. 😘 

Tax preparation checklist item numero 1: figure out who you paid and how much
 

Ever heard of a little form called a W-9? That’s the form you send to contractors before you pay them (yes, before). (Contractors are different than employees! Those babes fill out a W-4 and receive a W-2, but I digress.)

When we say contractors, we’re talking virtual assistants, second photographers, website designers, copywriters, but also lawyers, CPAs, and even landlords (like for business properties, think studio rentals).

And depending on how much you paid those contractors, the method you used to pay them, and the type of business entity they are… you might have to file a 1099.
 

(Don’t let your eyes glaze over. We pinky promise to make this easy to understand cuz we know this sh*t is confusing.)

Generally, the rule is, if you paid a contractor more than $600, using cash (or cash adjacent, like bank transfer, Zelle, Venmo, Check, etc.) you need to file a 1099. And to file that 1099 you first need your contractor to fill out a W-9. 

An easy-peasy way to avoid having to deal with all this bs is to pay your contractors through an official processor like HoneyBook, Stripe, PayPal Business, or with a credit or debit card. (Note: Payments by Stripe ACH/bank transfer would still require a 1099.)

1099 forms need to be sent to contractors and filed with the IRS (and some states) by January 31st. That’s why this is numero 1 on the tax preparation checklist for small business baddies such as yourself, because it’s the most pressing deadline. 

(PRO tip: Make your tax season life a million times easier and collect a W-9 before you start paying someone, regardless of how much you’re going to spend. That way you have all the forms you need when it comes time to file your 1099s the following year.)

And if you’re thinking, meh, I’ll skip it, who cares… you will, bb girl, because you’ll get slapped with a fine. 

Not to scare you, but if you fail to file your 1099s on time, you can get hit with a $50 penalty per form or more depending on how late you are. 

AND (yes it gets worse) if you flat out don’t send a 1099 when you should have, you technically aren’t supposed to write-off those payments as business expenses (ouch). Translation: If the contractor isn’t paying the tax on the money they earned, you are.

Keep more of your dough by being an on-top-of-it hoe. Agreed?

A quick recap for item #1 on the business tax prep checklist:

• Collect W-9s upfront (do it, trust us)
• Track all payments to contractors carefully (especially if you’re not using a credit card) 
• Know who needs a 1099 and have those bad boys filed by January 31st

Business tax prep checklist item numero 2: tally up your income and gather your receipts

Ideally, you’ve been setting aside time every few weeks to track your income and expenses in your bookkeeping spreadsheet or software. And, hopefully, you’ve been snapping pics of your receipts and sending them to yourself to file them away in a “2024 Taxes” folder.

(If you’ve heard us say what we’re about to say, we’re sorry, but we can’t shut up about the fact that you should not use QuickBooks to DIY your sh*t without first consulting with a profesh—its’s just too damn easy to screw up. Hopefully, you’re using a bookkeeping spreadsheet that was made for DIYers, like The Dime Sheet. Or, if you’re confident af in your QuickBooks skills—and perhaps partnering with a DIY support group—then we would approve.)

But if you’ve been putting off your bookkeeping all year because it makes your tummy hurt to think about it (we see you bb girl, and you aren’t the only one)… now’s the time to catch up. 

Go through your bank statements, record all the income you’ve made, even better if you categorize it be specific categories like Photography, Album Sales, etc.

(PRO tip: while we recommend keeping track of ALLLLL your receipts, and you 100% need to gather the ones for purchases over $500. Specifically, for hard goods like computers, camera bodies or lenses, desk, floral coolers, tables, etc.)

Oh, and another tip to make tax season a little less hellish:

Gather all your personal tax stuff too:

• 1099s from your bank (if you got paid interest)
• Forms from student loan providers
• Investments forms
• W-2s (if you’re also an employee)
• Health insurance forms 
• Retirement forms
• Charitable deductions that you couldn’t put under business 
• Your previous year’s tax return

You’re gonna need all of that.

A quick recap for item #2 on the business tax prep checklist:

• Make sure all of your income has been reported in whatever bookkeeping spreadsheet/software you use 
• Gather all your receipts 
• Gather forms for your personal tax return, too

Business tax prep checklist item numero 3: finalize your deductions
 

Deductions are funkin’ confusing. And unfortunately because they’re funkin’ confusing, they’re easy to mess up. (They’re one of the most common bookkeeping mistakes we see our badass clients making when they DIY their bookkeeping.)

And that’s because there are things you can write-off, but have certain limits (like client gifts). Stuff you can write-off in certain industries, but not others (like make-up if you’re a HMUA, but not if you’re a florist). And other stuff you can’t write-off at all (like that parking ticket you got while photographing an engagement session).

BUT. Getting your deductions right will help you avoid handing over extra benjamins to Uncle Sam.

That’s why we recommend talking to a bookkeeper (like us) to officially check this item of your tax prep checklist. That’s the only way to get personalized advice on your business tax deductions.

In general, you can usually write-off:

• Cost of goods sold: raw materials that you use for creating sellable goods, tools to make goods, and anything related to shipping costs
• Advertising: subscriptions (por ejamplo: Canva, Tailwind, Flodesk, GSuite, your website hosting platform, domain costs, etc.), marketing costs (business cards, ads, brand photoshoots, web design, copywriting, social media management, etc.)
• Business insurance: ’nuff said
• Professional fees: attorney fees, CPA fees, consulting fees and that kind of jazz
• Office sh*t: like notebooks, pens and pencils, a new clicky keyboard
• Rentals/leasing: for both equipment and properties
• Licenses: business license fees, LLC registration fees, etc.
• Travel: pretty much anything you pay for when traveling EXCEPT entertainment (think: taxis/Ubers, flights, lodging, meals, laundry, etc. but not shows/tours/excursions)
• Meals: but only while traveling, with clients, potential clients, colleagues, or business partners 
• Software and apps: QuickBooks, HoneyBook, Dubsado, Zoom, Abobe, Curate, PicTime, etc. 
• Education: Any courses you take, books you buy, mentorships you invest in, those kinds of things

And don’t forget about these commonly forgotten expenses that can be written-off:

• Bank fees: you should always track the full amount you charge your client under reported income and deduct the bank/process fees under expenses
• Mileage: track your business mileage so you can calculate your write-off at the end of the year (use The Dime Sheet or an app like MileIQ)
• Home office expenses: rent, utilities, and home repairs can have portion deducted while stuff like office-related repairs and furniture and decor are 100% deductible 
• Purchases made before your business was “legit” also totally count

A quick recap for item #3 on the business tax prep checklist:

• Enter your expenses into whatever bookkeeping spreadsheet/software you use
• Double-check that those expenses are actually write-offs
• Triple-check that those expenses are write-offs

And seriously, talk to a bookkeeper to quadruple-check that those expenses are write-offs (and that you didn’t miss any) because the US tax code is 70,000 pages long… and we’re not exaggerating. So def consult a profesh to make sure you’re writing-off everything you can (and nothing you shouldn’t).

Business tax prep checklist item numero 4: decide if you want to self-file or hire a CPA

It can be tricky finding a CPA your trust and sometimes you just want to YOLO and file yourself.

If you do decide to self-file, we’d recommend chatting up a bookkeeper to review everything first. 

(If you want some badass bookkeepers to check-in with, we offer Ask a Dime calls where you can ask all your burning questions. Our availability can be hella limited, but never fear, we got a list of reputable bookkeepers we can refer you too as well, so def reach out!)

And f*ck TurboTax, use FreeTaxUSA instead. (It’s way easier than TurboTax, and significantly cheaper too.) 

If you want to hire a CPA… you need to reach out right meow. (Because come January/February, all the good ones will be booked up babe.)

If you don’t know where to find a CPA, we’ve got a few recs:

• Ask your bookkeeper. (Also, a lot of times, bookkeepers can get you last minute VIP access to a dope CPA… consider that perk #162,532,434 of working with a bookkeeper… cough like us cough).
• Try providers like H&R Block (as long as you find someone you like and trust. Don’t be afraid to be picky. It’s your money on the line.) 
• Check out our go-to rec: Rocco Tundo, who is a funking rad CPA and loves working with small business owners.

Business tax deadlines and date you should def know for tax season

January 15, 2025: Q4 estimated tax payment due. (Download our free Quarterly Tax Guide for the what, how, and where)

January 29, 2025: 2024 Tax season officially begins. *Barf*

January 31, 2025: 1099s and W-2s are due. 

March 15, 2025: 1120S and 2553. These are S-Corp forms. 1120S is due if you are already an S-Corp in 2024, and 2553 should be filled out if you want to elect to be treated as an S-Corp in 2025.

April 15, 2025: Tax day, bb girl. This is the big boss tax deadline for personal tax returns, as well as sole proprietors, single-member LLCs, and C-corps. She’s also the Q1 estimated payment due date for 2025 because the IRS is rude. (This is also the last day to file an extension if you need more time to get things organized, April 15th is a busy b*tch.)

A word of warning about filing your business tax return early…

Don’t do it. Wait until at least mid-February.

We know, we know, you’re counting down the days until you can finally do your taxes (said no one ever). But the thing is, if you’re on the receiving end of something like a 1099 or a W-2, you might not get them until early February…

And if you jump the gun and file your tax return without those forms, you’ll have to amend your return and that would be such a drag. 

The Fast and Dirty Tax Prep Checklist for Small Businesses
 

• #1 – Figure out who you paid, how much you paid them, and what method you used so you know who to collect a W-9 form from and file 1099s for
  • (A lil tax tip: collect W-9s from any contractors you work with right outta the gate to make your tax season less stressful and gross)
• #2 – Record your income (make sure it’s all entered in your bookkeeping spreadsheet or software)
• #3 – Gather all your receipts (especially for purchases over $500 and specifically for physical goods)
• #4 – While you’re gathering all that sh*t anyway, get together all of your forms for your personal sh*t too (1099s from banks, forms from investing, health insurance, charity, etc.)
• #5 – Categorize your write-offs (and quadruple-check that they’re correct)
• #6 – Decide if you’re gonna file yourself (if so, review everything with a bookkeeper) or hire a CPA (and reach out to them ASAP)
• #7 – Keep an eye on all the tax deadlines so you don’t get charged extra fees and get to keep more of your cashola
• Oh, and #8 – Don’t jump the gun and file any tax returns before mid-February 

Feeling a pinch pukey? Need a lil extra support?

We’ve got you. More specifically, we’ve got a whole blog packed with advice to help you stack more cash and sweat less over taxes and bookkeeping. 

There’s the DIY corner of the Dory Dimes world so you can book an Ask a Dime call, check out the Bad B$tch Get Rich Club for quarterly support, download one of our juicy-ass freebies, or check out the financial tools we recommend (like the high-yield-savings account we drool over). 

And, of course, there’s the option of handing everything over to us to do it for you (unless we’re at max capacity and then we’re so sorry). 

You’re a bad b$tch. You’ve got this. (And if you’re still feeling freaked out, go find a cat to pet.)