Filing Taxes as an LLC for the First Time

Tax prep essentials: Gather financial records and reconcile books.
Bookkeeping tools: Use Receiptor AI for digitizing receipts and tracking expenses.
Filing requirements: Understand forms based on business structure (e.g., LLC, sole proprietorship).
Maximize deductions: Claim eligible expenses like travel, office supplies, and startup costs.
Tax payment methods: Pay electronically via IRS tools or EFTPS.

Tax season can be one of the most stressful times of the year for small business owners. Throw in small business taxes filing in the mix, and it’s nothing short of a horror story. Juggling mountains of paperwork, understanding complex tax codes, and keeping track of eligible deductions… the list is inexhaustible.

Thankfully, digital tools are transforming the way small businesses approach tax preparation. With the right tools and strategies, tax season doesn’t have to be a headache. In this blog, let’s explore all that you need to know about filing business taxes for LLC for the first time!

How to do taxes for small business

Managing taxes as a small business owner can seem daunting. But we’re here to help! Here are 5 tips to help you when it comes to filing business taxes for LLC for the first time:

1. Gather all your business records in one place

The first step in preparing your small business taxes is to collect all necessary records. These include:

Income statements,
Expense receipts,
Bank statements,
Your SSN,
Payroll documents, and
Any 1099 forms you’ve received or issued.

These records help you report your financial activity correctly and avoid potential audits. You can only move on to the other steps once you’ve gathered all your records.

2. Have your books ready for tax prep

Proper bookkeeping is the cornerstone of successful tax preparation. Start by recording every transaction from January 1 onwards. Categorize income and expenses accurately to ensure nothing is overlooked. For example, you should separate office supplies from travel expenses to streamline tax deductions later.

Now, perform a bank reconciliation. This step ensures your books align with your bank statements, catching errors or missed entries. Once reconciled, prepare key financial statements, such as an Income Statement (Profit and Loss) to show revenue and expenses and a Balance Sheet summarizing your assets and liabilities.

To simplify receipt management, use Receiptor AI, which digitizes and organizes receipts for easy tracking. Bye-bye paper records, and hello, the future of bookkeeping!

3. Understand how to file small business taxes

Small business tax filing depends on your structure and operations. You may or may not be eligible to pay self-employment tax, covering Social Security and Medicare at 15.3%. So, plan for this alongside estimated quarterly tax payments. Calculate these as each quarter ends based on projected income, setting aside money to avoid year-end financial strain.

Different business structures have unique filing requirements:

Sole Proprietorships: File Schedule C with your personal return (Form 1040).
Partnerships: File Form 1065; partners receive Schedule K-1 for reporting income.
LLCs: Single-member LLCs file like sole proprietors; multi-member LLCs file like partnerships unless electing corporate taxation.
Corporations: File Form 1120 (C corp) or Form 1120-S (S corp).

Don’t overlook state and local tax obligations, which may include sales tax, excise tax, or franchise tax depending on your location.

4. Know your small business tax deductions

Who likes paying more in taxes when you can pay less? The secret ingredient to saving money while paying taxes is knowing your tax deductions!

The IRS allows small businesses and self-employed individuals to save up a lot through tax write-offs, such as:

Vehicle and travel expenses
Home office expenses
Laundry and uniform expenses
Insurance
Office supplies
Startup costs up to $5,000

Tip: To claim a tax deduction, ensure you have a valid expense receipt.

5. Explore how to pay small business taxes

Of course, there’s no use for extensive tax planning if you don’t know when and how to pay them! For most small businesses, the deadline is April 15, though partnerships and S corporations must file by March 15. Use the correct forms for your business type, such as Schedule C or Form 1120.

Wondering how to pay these taxes? Luckily, there are a couple of methods. You can file small business taxes electronically with the IRS or explore other payment methods, which include:

Best Practices for Tax Management

Here are three best practices to ensure your small business stays financially healthy and tax-compliant:

1. Work with tax professionals

Hiring a CPA or tax advisor specializing in small business taxes can be one of the best investments for your LLC. These experts save you time and help reduce errors by providing accurate and personalized guidance.

They can identify deductions you may have overlooked, ensure compliance with ever-changing tax laws, and develop strategies to minimize tax liability!

2. Digitize your books

Your books are the main resource that drive your tax prep. When they become digitized, your life becomes hassle-free! Accounting software like QuickBooks, FreshBooks, or Receiptor AI helps you keep financial records accurate and easily accessible. These platforms also allow you to track income, expenses, and tax obligations in real time, making it easier to stay organized throughout the year.

3. Regularly review your finances

Set aside time at least once a month to review your income, expenses, and any upcoming tax deadlines. Regular financial reviews allow you to monitor your cash flow and ensure that your books

are up-to-date. Not only does it help you catch and resolve discrepancies early but also ensures that you're setting aside enough funds to cover taxes!

Make Small Business Taxes Easy with Receiptor

Feeling like filing taxes for an LLC for the first time is still treacherous waters? Let Receiptor AI help you. Receiptor AI revolutionizes tax preparation for small businesses by automating the most time-consuming aspects of tax management.

Our AI-powered platform automatically captures, categorizes, and organizes receipts and business expenses throughout the year, ensuring you're always audit-ready. With real-time expense tracking and intelligent categorization, Receiptor AI helps businesses maintain accurate records while maximizing potential deductions.

How do I prepare my small business taxes for the first time?

Start by gathering all business records, including income statements, expense receipts, bank statements, payroll documents, and any 1099 forms. Ensure proper bookkeeping, perform bank reconciliation, and prepare key financial statements like an Income Statement and Balance Sheet.

What bookkeeping tools can help with small business taxes?

Digital tools like Receiptor AI, QuickBooks, and FreshBooks can simplify bookkeeping by digitizing and organizing receipts, tracking income and expenses, and ensuring accurate records for tax preparation.

What tax forms do LLCs need to file?

Single-member LLCs file taxes like sole proprietors using Schedule C with Form 1040. Multi-member LLCs typically file like partnerships using Form 1065 unless electing corporate taxation, in which case they file Form 1120.

What are common small business tax deductions?

Common deductions include vehicle and travel expenses, home office costs, insurance, office supplies, and startup costs up to $5,000. Ensure you have valid receipts to claim these deductions.

How can I pay small business taxes?

You can pay small business taxes electronically through the IRS, using credit or debit cards, direct pay, EFTPS, or the IRS Online account. The deadline is typically April 15, but partnerships and S corporations must file by March 15.

What are the best practices for small business tax management?

Best practices include working with a CPA or tax advisor, digitizing your books with tools like Receiptor AI, and conducting regular financial reviews to monitor cash flow and stay compliant.

How does Receiptor AI help with tax preparation?

Receiptor AI automates tax preparation by capturing, categorizing, and organizing receipts and business expenses. It offers real-time expense tracking and intelligent categorization to maintain accurate records and maximize deductions.