How To Prepare For Tax Season As A Small Business | Marketing for S.O.B's (Small Owned Businesses)

As a small business owner, it can difficult to navigate your business’s taxes, let alone your personal taxes.

This week on the S.O.B. (Small Owned Business) Marketing podcast, Vivian and I are discussing how small businesses can prepare for tax season throughout the year, AND what they can do during tax season to make the process go by smoothly.

“Marketing” HOT TAKE: I personally like having paper copies of my taxes. Yes, this isn’t necessarily marketing centric - but it’s related to our topic today and I want to hear your opinions! Let us know in the comments if you print out your taxes or keep digital copies.

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Chapters:

00:00 Welcome to our 150th Episode!

04:32 HOT TAKE - Digital vs. Paper Copies of Taxes

06:33 Preparing for Tax Season

21:13 What To Do During Tax Season

25:32 TLDL; How To Prepare For Tax Season As A Small Business

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*Pre-episode clip*
Vivian: Let's just kind of use this as a baseline. If you own a small business, which obviously you do if you're listening to this podcast, you need to have someone preparing your taxes for you.

Chelsea: Maybe they just think we're cool, Vivian.

Vivian: I mean, they just hang out here.
*Intro*
Chelsea: Hey everyone and welcome to the S.O.B. Marketing podcast. Where we celebrate to S.O.B. you are, and if you haven't figured it out yet - we mean Small Owned Business, we don't mean S.O.B...

Vivian: Listen, we know that as a small business owner you are working hard on the daily to keep your business fully operational while trying to promote it. And while some days it may feel like the business is owning you, if we're being honest with each other I bet you would admit that you wouldn't give up the insanity for anything.

Chelsea: Our commitment here at the S.O.B. Marketing podcast is to give you the real talk, what works when it comes to advertising, marketing, and promoting your business. And then what doesn't really work.

Vivian: And Chelsea and I promise to always keep the conversation real.

*Beginning of Episode*
Vivian: Dollar, Dollar bills, y'all. That's what we're talking about today. You definitely want to listen to this episode, even though it is not directly related to marketing, it's marketing adjacent.

Chelsea: Absolutely.

Vivian: All right. We are talking about all things taxes.

Chelsea: Everyone's favorite topic, especially this time of year.

Vivian: I know, and Chelsea, why did we want to make this connection between marketing and then the importance of preparing for taxes, all that good stuff.

Chelsea: Because we are all small businesses here. We're all SOBs and you're never going to believe this, but getting your taxes right has a big impact on your marketing.

Vivian: Absolutely. We want to be sure that you guys have the budget there that's available for you later in the year to be able to take on these marketing opportunities. This is one of the ways that you can do that, right? Making sure that you get all of that tax information correct.

Chelsea: So you don't owe the government thousands of dollars.

Vivian: That is correct, and for some of you, that's just going to be the reality. You got to pony up and pay it. Part of the discussion that we're having is what to do before tax season.

Chelsea: Yes. A big chunk of this conversation is going to be about before tax season because getting tax season right is really about prep. It's about the prep. A portion of this conversation will be about what to do during tax season. But really big part of it is going to be the prep.

Vivian: All right. Before we dive into that conversation, just a friendly reminder, if you're here, why don't you stick around. Go ahead and subscribe. Go ahead and listen to the, our last episode was number a hundred and what?

Chelsea: 50. 150.

Vivian: All right. 150. So this is 151, meaning you have 150 episodes to go catch up on. We cover various marketing topics. We think you're going to enjoy the conversations because Chelsea and I try to keep them light, straight to the point and with none of the fluff. We don't like any of that marketing nonsense.

Chelsea: Mumbo jumbo. Yeah.

Vivian: Just not our vibe. Anyways, Chelsea, I'm sure you have a reminder, TLDL, Too Long Didn't Listen, that's a chapter.

Chelsea: Yes. At the end of this episode, there is a TLDL chapter where I will give you a summary or synopsis of this conversation. So if you are strapped for time, which I get it, you're a small business owner, you're an SOB, so you might not have the time to listen to this conversation. You can get a synopsis, but then when you have the time, come back and listen to this full conversation.

Vivian: Absolutely.

Chelsea: Yes. Okay, Vivian, before we get into the meat and potatoes.

Vivian: I like that we're hearty girls around here. We always talk about meat and potatoes.

Chelsea: I mean, I'm not a, well, I do like a good salad. I mean, all of my salads have to have protein in it.

Vivian: Yeah. If you're vegan, we love you just as much.

Chelsea: No, I love you. Just, I'm not vegan.

Vivian: We had a vegan muffin one time at a little cafe. It was totally my jam. I do love me some good vegan food.

Chelsea: It was fine. It was OK. Vivian was really into it. Anyways, I have a marketing hot take. Vivian, I am a digital girl. Right? I grew up in this digital age. I'm a Zillennial.

Vivian: Okay. For reference, what year were you born?

Chelsea: 1998. So I'm in that weird 1997 to like 2001. They're like, are you millennials? Are you Gen Z? We haven't really decided. So they call it Zillennial. I'm a Zillennial. I like to digitize everything, not my taxes. I like hard copies of my taxes. I like to print them out. I like to physically put them in a box and have them somewhere.

Vivian: Yeah. I will agree with you on this hot take. I also like good paper copies. By the way you guys, I don't know if you knew this. Do you know how long you're supposed to keep hard copies of your taxes? How many years?

Chelsea: I think the answer is not forever.

Vivian: No. You can throw them away eventually. There's no reason for you to keep taxes from like 1999.

Chelsea: I'll keep that in mind. How long, Vivian? Do you know the answer?

Vivian: Six years. All right. I say this because my father-in-law, my precious father-in-law is an accountant by trade, a CPA. Every year when we get our tax returns back, he puts a sticker on the envelope that says, keep this for six years. All right.
I'm guessing that's because the government even back like 2023, 2020, they can say, hey, we want to take a look, pull those things out.

Chelsea: You know, that's, that sounds like the government to me.

Vivian: That's right. All right. So tell us, where do you want to get the conversation kicked off though? What's a good starting point for us? Good starting point, let's start with before tax season. We're prepping before tax season.

Chelsea: Can we also say though, you actually got some of this information from an actual person that helps to prepare taxes, correct? Yes, no names or anything like that, but I did speak with some tax pros and they gave some advice on what small business owners should be doing throughout the year so that when tax season comes, when February comes along, they can be prepared for what's to come.

Vivian: Yeah. When we start off talking about the prep work, we understand that we're in 2025 tax season, right?

Chelsea: Yes.

Vivian: But we're in January. Well, when this episode comes out, it's going to be beginning of February. It's still early enough that you guys can do the prep work for next year for 2026. That's why we thought this conversation would be relevant because we want you to be prepared for 2026.

Chelsea: Yes, absolutely. The number one piece of advice that I heard from Tax Pros was stay organized. Have all of your documentation organized together. Have it in a system so you can streamline your bookkeeping. It could be QuickBooks, most people use QuickBooks. It doesn't have to be QuickBooks. You can use whatever you want as long as it is organized.

Vivian: Yeah, and you guys, we talk a lot about AI here around these parts. Just so you know, even these type of platforms that are tracking some of your financial stuff or record keeping, they now integrate AI too. Something as simple as like, if you're uploading a receipt, it can very quickly identify or try to lump that receipt into the appropriate category, whether that be for equipment, whether that be for software, whatever it is. So I think you'll be impressed that some of these platforms are able to do that now. So it kind of takes the load off of you to have to go in and label it correctly. But an important part of organizing is to actually keep things labeled correctly. So that way it makes it easier at the end of the year for you to identify what your expenses were in a particular area.

Chelsea: Yeah Vivian. Expenses, gross receipts, purchases, travel, transportation, entertainment, even gifts if you plan on taking a tax deduction on these items. Assets, employment documents, if you have employees, this is all stuff that you need to keep track of. Y'all, if you have employees, employee payroll taxes can be such a hassle.

Vivian: They're messy.

Chelsea: They're very messy. Make sure you understand what needs to be done when it comes to employee taxes. Or if you're using a service or a company, make sure that the company is reputable and that they know what they're doing. There have been horror stories of small businesses trusting companies to do the payroll tax correctly, and they don't.

Vivian: Yeah, and this is something we may bring up later on, but let me just mention it here. What's interesting is if you guys have somebody that you trust with your tax preparation, they can help you in both these areas, right? So one of the areas you can do with the organizing is ask them, do you have a spreadsheet that you prefer that I use? Do you have a form that you prefer that I fill out? Most of the time, because they are doing that on a full-time basis, they have their way of tracking and they will very clearly tell you, this is where and how I want you to track things throughout the year. So that way it makes it easy for us to submit this stuff. Same thing with the payroll tax. Usually if you're hiring a professional to do this on your behalf, on behalf of your business, you can very specifically ask them, can you explain to me how this works and what my part is and what your part is?

Chelsea: Yes. Vivian, we already mentioned, but make sure you're categorizing everything, labeling everything. I know I just said I like physical copies of my tax returns, but that's, you know, the end result. Make sure you're digitizing everything. It just makes it easier.

Vivian: Even if you don't have a form that you're filling out. My husband also runs a business, one of the things that we like to do is, his responsibility is simply to take a photo of the receipt and scan it to me. Then basically we organize it into folders by month. That way it's easy for me to go back into January of 2025 and take a look at everything that's been spent for that year, or for that particular month. Come up with a system that works for you. You guys know yourself best. You know how you go out there and run your business.
If you're also, if you have employees that are spending on your behalf, on behalf of the business. That are buying tools, that are doing all this stuff, gas mileage, all that, those are all things you also want to track. If this sounds foreign to you, my recommendation is that you do sit down with a tax professional and you say, hey, just give me an idea of all the things that I should be tracking so that I can file at the, you know, as expenses and whatnot. Because you'd be surprised. I think there are probably things out there, opportunities that you have that maybe you didn't know you could write off expense, do all of that.

Chelsea: I, Vivian, write off half of my phone bill because I use my phone for work. Yes.

Vivian: Yes. For business calls.

Chelsea: For business calls.

Vivian: Yes. The other thing too is a lot, one area that I think a lot of people don't keep track of is maybe if you are doing education, right? If you're in an industry where you are taking courses, I'm thinking real estate. You're having to keep up and make sure that you keep up with the legalities of it and with new things that are going on. If you're going out to seminars, traveling for that stuff. This is all stuff that you want to bring up and let your accountant or whatever company is doing your taxes know about so that way they can see if there are opportunities for you to include that.

Chelsea: Yes. Love that. Vivian, another big, big point that was brought up to me when I was talking with these tax professionals was make sure you are keeping your personal and your business expenses separate.

Vivian: Yes, try not to muddy those waters.

Chelsea: Oh, no, no, no. Make sure it's very separate. Because here's the thing. Once you start mingling that stuff together, the IRS can stick their noses in your personal accounts. So make sure that you have a business account, a business credit card, whatever you need, just make sure it's separate from your personal accounts.

Vivian: Absolutely. I think that's fair advice and it helps you to track easily. That way if there is no overlap, you kind of know anything that was spent or anything that was charged, anything that it's going to be in the business account stuff because I never mesh them together. We don't overlap.

Chelsea: Also, Vivian, and this is a big one, make sure that you have classified your business correctly. What I mean by this, are you a sole proprietor? Are you an LLC? Are you a S corporation? All of those things. It costs you money in taxes if you pick the wrong one.

Vivian: Yeah, well, and I guess this is the thing is a lot of us when we think business, we just think LLC.

Chelsea: Yeah, no, there's so much more.

Vivian: Yes, and this is where it can behoove you to have an accountant that you work with year after year because if they're helping you with the setup, if they have helped you come to the conclusion of which is the best for you. It's going to change a little bit the way they file or the things they include, it does. It has, it comes with its own little set of rules. What you could do for an escort, you don't necessarily or can't do for an LLC and vice versa. They're going to be very well versed and schooled in that. They are probably the best person to have that conversation with.

Chelsea: Yes, and one point that I'm going to bring up a little later, but I'll mention it now, is that you want to find a tax professional or an accountant that you trust and you want to stick with them because as your business evolves, they get to follow you in that journey. They can tell you and help you find what works best for you. So maybe you started as a sole proprietor and now you should be an S-corp. They will be able to tell you that if you stick with them.

Vivian: Right. Well, and also the value in that is just like any other relationship where it allows them to get to know your industry and your business really, really well. Also if they've helped you to set up any of this stuff, they know their work, right? They know what they've done before. But it is something that I think is extremely valuable and as a small business owner, it's probably one of the first things you should be doing, but don't fret. If you're a couple of years in, you don't have an accountant that you go to year after year. It's never too late. Be sure that you find someone that is a good fit for you. Also someone that you can trust, like Chelsea said, that is reputable, that has experience, and just the relationship can grow and flourish from there.

Chelsea: Absolutely. Skipping a little bit ahead because that's something I want to talk about for during tax season.
My last, not my last, second to last, and really, really important. Something that I discovered. Make sure you're paying your estimated taxes. Okay? I pay quarterly taxes. So that means every three months, I send the IRS money. It's very important because if I don't do that, then I owe the IRS even more money because if during tax season you do your tax, you file your taxes and you owe too much money, then they give you a penalty for owing too much money.

Vivian: Yeah. So that's all of the details that obviously we're not people that prepare taxes. So be sure.

Chelsea: I can't tell you the exact numbers or anything like that. I can just tell you that if-

Vivian: From personal experience.

Chelsea: From personal experience, if you owe too much money, they can penalize you for owing too much money. So make sure you are paying your estimated quarterly taxes or however you decide to set it up. There are multiple ways to do it, but make sure you're paying your estimated taxes.

Vivian: Absolutely.

Chelsea: Yes. My last thing, Vivian, is be aware of key dates. So for example, if you're an S-corp, you have a filing deadline of March 15th. Okay, that's important to know. That's something that if you had a dedicated accountant or tax professional, they would know that for you.

Vivian: Yes, these dates are also available to you at IRS.gov. So you can, that is the official website. Go and look at filing dates there or simply ask your accountant because trust me, they know the dates. They know when everything is due. Just say, hey, when do I need to get all the information to you in time for you to prepare something to be filed for that date? So don't forget that there is also, obviously you're not going to be the only client that somebody has and that means they need to take time to prepare stuff. So even if you get them something the day before, it doesn't mean that they're necessarily going to be able to submit it on time.

Chelsea: In a day, yeah.

Vivian: So you want to be sure that your communication is clear with them about how much lead time they need. That's always good for you to know as a small business owner.
*S.O.B. Community Ad*
Vivian: This episode of the S.O.B. Marketing podcast is brought to you by the S.O.B. Community. If you are a small business owner that is neglecting your marketing and you feel like you've wasted time and money on marketing help that didn't deliver. Or if you're just craving support from people who actually get what it's like to run and promote a small business, then our membership community is for you. Visit skool.com/sob to sign up today to get instant access and weekly support. That's S-K-O-O-L dot com slash sob.

*End of S.O.B. Community Ad*
Chelsea: Okay Vivian, so let's talk about during tax season.

Vivian: So this is right now, 2025. You guys are preparing your 2025 taxes. This is still stuff you can do as of this recording.

Chelsea: Yes, this is what you can do right now, which is do your research and hire someone with knowledge and expertise that can help you with your specific business. I mean this with my full heart.

Vivian: Her full chest. She's saying it.

Chelsea: I'm saying it with my full chest. Please find someone with the knowledge to help you with your small business, with your taxes. Expertise is really important in this scenario because taxes are complicated and they can be really difficult.
I would not, I don't want to say skimp out, but I would find someone who can really, really help you.

Vivian: Let's just kind of use this as a baseline. If you own a small business, which obviously you do if you're listening to this podcast, you need to have someone preparing your taxes for you.

Chelsea: Maybe they just think we're cool, Vivian.

Vivian: I mean, they just hang out here.

Chelsea: Yeah, maybe they're just really into marketing and they're interested in small businesses. They don't have one yet.

Vivian: Perhaps.

Chelsea: Okay, sorry. Go ahead.

Vivian: You probably should have someone helping you prepare your taxes just because that is a lot for you to take on. And hey, listen, you're a small business owner. You're not in the industry. It's not your job to know tax law. So why not partner with someone, find the right fit? Whoever does have that experience so that they can help navigate. As Chelsea said too, the other part of it is if your business stuff has to be separate to some extent, then you're going to be doing your stuff, the business stuff, they gotta be somewhat separate. You need to have someone that's able to do that and to tell you very specifically, hey, this is what we need to do, my recommendation for your business filing.

Chelsea: Yes, absolutely, and we talked about it earlier already. If you can stick with the same tax professional, if you find a tax professional or an accountant and y'all don't mesh well, do not stick with them. I'm not saying that you have to force yourself to stick with someone. Go ahead and find someone that works with you. Find someone that meshes with you, you know. Find your freak, okay?

Vivian: There are plenty of tax professionals out there to choose from. So just be sure, just like with any other vendor that you utilize for your business. I mean, we tell you guys to do this with the software that you use, the platforms that help run the business. Pick what works best for you. What works for somebody else may not work for you. If you need a little more of the hand holding and-

Chelsea: I do.

Vivian: Yeah. Maybe the person you're with doesn't offer that. It's not their style. Maybe they don't have time. Then, you know, switch. Find someone that is willing to hold your hand through some of this stuff. There is no shame in that. It doesn't make that person a bad person. It doesn't make you a bad person. It just means you need to do what's best for your small business, and that is finding the right tax professional.

Chelsea: Absolutely. My last tip is, and this is kind of a big one, Vivian, try to get this done as soon as possible. Because if something is wrong, you and your tax pro have enough time to figure it out and get it situated. So try to meet with them as soon as possible.

Vivian: That's good advice that I personally do not follow, but I need to and I will. I am taking notes.

Chelsea: Okay, perfect. Thank you. As someone who your taxes, my taxes depend on your taxes. Yeah, I'd appreciate that.

Vivian: All right, guys. So I think that is...

Chelsea: I think it's time for the TLDL.

Vivian: Yeah, let's do it.

Chelsea: This is the TLDL chapter, too long didn't listen. If you skipped ahead, I'm going to go ahead and give you a brief synopsis of what we talked about, but make sure you go back and listen to this entire conversation because there's some really good stuff in there. Okay, today we talked about how you can prepare for tax season throughout the year and what you can do during tax season to get the most out of it.
So to prepare for tax season, we want to make sure that you guys stay organized, that you categorize and label everything, that you digitize everything. That's a big one. Make sure you are keeping your business and your personal expenses separate, that you're classifying your business correctly, that you're paying your estimated taxes, and that you are aware of key dates that you might have to meet based on your business filing, based on the type of business that you are.
During tax season, we want you guys to do your research and find a tax professional with the knowledge and expertise to help you guys, and that you find someone that you can stick with for multiple years. We want you guys to also try to get this done as soon as possible in case there is anything wrong so you guys can get this fixed as soon as possible.
Vivian, I think that was the conversation.

Vivian: Yep, that certainly is. Friendly reminder, if you like this episode, please leave us a review and be sure to check out our 150 other episodes that we have available for you to listen today.

Chelsea: Yes. And you know what? Go be the best SOB you can be.