What do I need to prepare my business tax return for September 15, 2025?
- Rebecca Tabert, CPA
- Jul 18
- 10 min read
Are you ready to file your business taxes for September 15, 2025? Understanding what you need ahead of time can make the process smoother and help you avoid costly mistakes.
Preparing your business taxes for the September 15, 2025, deadline is an essential step to maintain compliance and avoid costly penalties. This process involves gathering key financial records, understanding applicable tax laws, and ensuring that all necessary forms are completed accurately. By staying organized and proactive, business owners can minimize errors, optimize deductions, and reduce the stress that often accompanies tax season. Taking the time to prepare thoroughly not only helps meet the filing deadline but also provides valuable insights into the financial health of your business.
What do I need for my business tax returns?
Filing your business tax returns requires a variety of documents and information to ensure accuracy and compliance.
Checklist of what you’ll need to gather:
Basic Business Information:
Business name, address, and EIN (Employer Identification Number).
Business structure (e.g., S-corporation, C-corporation, partnership, or sole proprietorship).
State tax ID (if applicable).
Income Records:
Revenue reports, including gross receipts or sales.
1099 forms if applicable, documenting payments received.
Bank statements reflecting business income.
Expense Records:
Receipts or documentation for deductible expenses (e.g., rent, utilities, office supplies, marketing costs).
Payroll records, including salaries, wages, and benefits.
Records of depreciation and amortization for assets.
Financial Statements:
Profit and Loss Statement (P&L): Provides a summary of your business's revenues, expenses, and net income for the year.
Balance Sheet: Lists your business’s assets, liabilities, and equity as of the end of the tax year. This document is essential for determining the financial position of your business and ensuring proper tax reporting.
Tax Documents:
Previous year’s tax return for reference.
Estimated tax payments made throughout the year.
Any applicable tax credits or deductions (e.g., R&D credits, energy-efficient improvements).
Financial Statements:
Profit and loss statement (P&L).
Balance sheet reflecting assets, liabilities, and equity.
Cash flow statement if available.
Industry-Specific Requirements:
Documentation for specific deductions or credits relevant to your industry.
Records of inventory and cost of goods sold (COGS), if applicable.
Other Supporting Documents:
Contracts, leases, or agreements impacting the tax year.
Loan or financing documents showing interest payments.
Any correspondence with the IRS or state tax authorities.
Ensuring these documents are complete and accurate will streamline the filing process, help identify potential deductions, and minimize the likelihood of an audit. If you’re unsure about specific requirements, consult with a tax professional to avoid mistakes.
Is there a difference between my business and personal tax returns?
Yes, there is a significant difference between business and personal tax returns, especially in terms of purpose, structure, and the types of income and expenses reported. Understanding these differences is crucial for proper tax compliance and optimization.
Purpose of Filing:
Business Tax Returns: Focus on reporting the income, expenses, and profits of the business entity. The goal is to determine the taxable income for the business and pay any taxes owed at the entity level.
Personal Tax Returns: Reflect your individual income, deductions, and tax liabilities, including income from wages, investments, and potentially from your business if it is a pass-through entity (e.g., sole proprietorship, partnership, S-corporation).
Types of Income and Deductions:
Business Tax Returns: Include business-specific income and expenses such as operational costs, payroll, depreciation, and industry-specific deductions.
Personal Tax Returns: Cover wages (W-2), investment income (1099), personal deductions (e.g., mortgage interest, charitable contributions), and credits (e.g., child tax credit, education credits).
Filing Requirements and Forms:
Business Tax Returns: Depend on the type of business entity:
S-Corporations: File Form 1120-S.
C-Corporations: File Form 1120.
Partnerships: File Form 1065.
Sole Proprietors: Report business income on Schedule C of Form 1040.
Personal Tax Returns: Use Form 1040, including additional schedules if needed for business or investment income.
Tax Obligations and Deadlines:
Business Tax Returns: Have separate deadlines based on the entity type (e.g., March 15 for partnerships and S-corporations, April 15 for C-corporations). These returns can be extended to September 15 and October 15th, respectively.
Personal Tax Returns: Are typically due by April 15, though extensions can align business and personal filings for convenience.
Impact on Each Other:
Income from certain business structures (e.g., S-corporations, partnerships) flows through to the owner’s personal return, affecting individual tax liability.
Deductions or losses from businesses can influence personal tax outcomes, subject to IRS rules.
While both returns are intertwined for some business owners, it’s essential to treat them as distinct filings. Properly segregating business and personal finances simplifies the preparation process and ensures compliance with tax laws. Working with a professional can help navigate the nuances of both filings effectively.
How do I use my business tax return to affect my personal tax returns?
For many business owners, particularly those operating pass-through entities like S-corporations, partnerships, or sole proprietorships, the business tax return directly influences their personal tax return.
Pass-Through Income:
Business income and deductions flow through to your personal tax return using forms like a K-1.
The net income or loss from the business is reported on your individual tax return (Form 1040), impacting your taxable income.
Qualified Business Income (QBI) Deduction:
Eligible business owners can claim a QBI deduction of up to 20% of qualified business income.
This deduction directly reduces taxable income on the personal return, but calculations depend on the information from your business return.
Self-Employment Taxes:
Sole proprietors, partners, and LLC members are subject to self-employment taxes, which cover Social Security and Medicare contributions.
The amount is calculated based on business profits and reported on Schedule SE of your personal return.
Business Losses:
Losses reported on your business tax return may offset other income on your personal tax return, reducing overall tax liability.
Limitations, such as the excess business loss rule, may apply, so it’s essential to understand how much of a loss can be used.
Tax Credits:
Some business-related tax credits, like the Small Business Health Care Tax Credit, can also pass through to personal tax returns.
These credits reduce your overall tax liability on a dollar-for-dollar basis.
Health Insurance Deductions:
If you are self-employed, you can deduct health insurance premiums for yourself, your spouse, and dependents directly on your personal tax return, reducing your taxable income.
Retirement Contributions:
Contributions to retirement plans like a SEP IRA or Solo 401(k) are deductible on your business tax return and may also reduce your taxable income on your personal return.
State Taxes:
Depending on your state, business taxes paid or credits claimed may also impact your personal state income tax return.
Leveraging your business tax return to optimize your personal tax return requires strategic planning and a deep understanding of tax laws. Working with a professional can help you maximize deductions and credits while ensuring compliance with IRS regulations.
When do I need to prepare and file my 2025 business tax returns?
Timely preparation and filing of business tax returns are critical to avoid penalties and maintain compliance. The deadlines depend on your business structure and tax obligations.
Key Deadlines for Business Tax Returns:
March 15, 2025: Filing deadline for S-corporations and partnerships (Forms 1120-S and 1065, respectively).
April 15, 2025: Filing deadline for C-corporations (Form 1120) and sole proprietors filing on Schedule C of Form 1040.
Extended Deadlines: If you file for an extension, you generally have until September 15, 2025 (S-corporations and partnerships) or October 15, 2025 (C-corporations and sole proprietors).
Recommended Preparation Timeline:
January – February 2025:
Collect all income and expense documentation, including financial statements and supporting records.
Review prior year’s tax return for reference.
Consult with your tax preparer or accountant to address any new tax law changes.
Early March 2025:
Estimate your financial statements, including the balance sheet and profit and loss statement.
Estimate and extend your tax returns (both business and personal).
Mid July 2025:
Finalize your financial statements, including the balance sheet and profit and loss statement.
Ensure all required forms and schedules are complete and accurate.
Submit your return to the IRS or your tax preparer well before the September 15 deadline to allow time for corrections if needed.
Late Filing Penalties:
Filing after the deadline without an approved extension can result in penalties, including:
Failure-to-file penalties, typically 5% of the unpaid taxes per month, up to 25%.
Interest charges on unpaid taxes from the original filing deadline.
Tips for Meeting Deadlines:
Use accounting software or hire a bookkeeper to keep your records organized throughout the year.
Schedule periodic check-ins with your accountant to review your financials and address any issues early.
File for an extension if you anticipate delays, but remember this only extends the time to file, not to pay taxes owed.
Bullet Point Timeline:
Now: Begin organizing records and consulting with your tax professional.
January – February 2025: Gather all financial documents and ensure bookkeeping is up-to-date.
March 1-10, 2025: Finalize financial statements and review for accuracy.
March 15, 2025: Estimate and extend your business tax return or file if ready.
April 15, 2025: Pay any taxes owed if not already done. Estimate and extend your business tax return or file if ready.
September 15, 2025: Finalize and file your business tax return.
What are the steps to preparing my business tax return?
Preparing your business tax return involves a series of methodical steps to ensure accuracy and compliance with tax laws.
Organize Financial Records:
Gather all income and expense documents, including receipts, invoices, and bank statements.
Ensure financial statements such as the profit and loss statement (P&L) and balance sheet are up-to-date.
Review Tax Obligations:
Confirm your business entity type to identify the correct forms and filing requirements (e.g., Form 1120 for C-corporations, Form 1065 for partnerships).
Verify deadlines for filing and payment to avoid penalties.
Compile Income Information:
Collect all sources of business income, including sales, services, and 1099 forms received.
Cross-check income records with your bank statements to ensure consistency.
Document Business Expenses:
Categorize and document deductible expenses such as rent, utilities, employee salaries, and marketing costs.
Include industry-specific deductions, such as inventory costs or research and development (R&D) expenses.
Calculate Depreciation and Amortization:
Use IRS guidelines to calculate depreciation for equipment, vehicles, and other fixed assets.
Include amortization of intangible assets, if applicable.
Account for Estimated Tax Payments:
Record any estimated tax payments made throughout the year to accurately calculate taxes owed or refunds due.
Review Applicable Tax Credits:
Identify tax credits your business may qualify for, such as the Work Opportunity Credit or Small Business Health Care Credit.
Gather documentation to substantiate claims for these credits.
Prepare and File Required Forms:
Complete the necessary IRS forms for your business type (e.g., Schedule C, Form 1120, Form 1120-S).
Attach supporting schedules and documentation as required.
Double-Check for Accuracy:
Verify all figures, ensure calculations are correct, and cross-reference data with source documents.
Use tax preparation software or consult with a professional to avoid common errors.
Submit Your Return:
File your tax return electronically or by mail, depending on IRS requirements and your preference.
Retain copies of the filed return and all supporting documents for at least three years.
Pro Tips:
Start early to avoid last-minute stress and ensure you have ample time to address any discrepancies.
Use professional accounting software to streamline record-keeping and tax preparation.
Work with a tax professional to maximize deductions and ensure compliance with changing tax laws.
Most common myths about business tax returns
Myth: Filing an extension means I don’t have to pay taxes until the extended deadline.
Reality: An extension only gives you more time to file your return, not to pay taxes owed. Payments are still due by the original deadline, and failing to pay on time can result in interest and penalties.
Myth: If my business didn’t make a profit, I don’t need to file a tax return.
Reality: All businesses, even those that operated at a loss, are required to file a tax return. Reporting losses can be advantageous, as they may offset future profits or reduce current personal income taxes for pass-through entities.
Myth: Personal and business finances don’t need to be kept separate.
Reality: Mixing personal and business finances can lead to IRS scrutiny, difficulty claiming deductions, and legal issues if your business is audited. Maintaining separate accounts is essential for accurate record-keeping and compliance.
Myth: I don’t need to report cash income from my business.
Reality: All income, including cash, must be reported to the IRS. Failing to report cash income is considered tax evasion, which carries severe penalties, including fines and potential criminal charges.
Myth: Small businesses can’t claim significant deductions.
Reality: Small businesses can take advantage of many deductions, such as home office expenses, business mileage, and depreciation. Overlooking these can result in paying more taxes than necessary.
(FAQ) Frequently Asked Questions about business tax returns
Question: What happens if I miss the deadline to file my business tax return?
Answer: Missing the filing deadline can result in penalties, including a failure-to-file penalty, which is typically 5% of unpaid taxes for each month or part of a month the return is late, up to 25%. Interest on unpaid taxes also accrues from the original filing deadline. Filing as soon as possible can help reduce penalties and interest.
Question: Can I deduct personal expenses used for business purposes?
Answer: Certain personal expenses used for business purposes, like a portion of home office costs or personal vehicles, can be deducted. However, the IRS requires clear documentation and proper allocation between personal and business use to avoid disallowances during audits.
Question: What is the difference between an extension to file and an extension to pay?
Answer: An extension to file (e.g., Form 7004 for businesses) allows more time to submit your tax return but does not extend the time to pay taxes owed. Taxes must still be paid by the original deadline to avoid penalties and interest.
Question: How long should I keep records related to my business tax return?
Answer: The IRS recommends keeping tax-related documents for at least three years. However, for certain items like asset depreciation or potential audit concerns, records should be retained for longer—up to seven years or more.
Question: Can I claim a business loss on my personal tax return?
Answer: Yes, if your business is a pass-through entity (e.g., S-corporation, partnership, or sole proprietorship), business losses can flow through to your personal return and offset other income, subject to IRS limitations such as the excess business loss rule.
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Final Thoughts
Preparing your business taxes by the March 15, 2025 or September 15, 2025, deadline requires organization, attention to detail, and a thorough understanding of your business’s financial situation. By gathering the necessary documents, adhering to deadlines, and leveraging deductions and credits, you can minimize tax liability and avoid penalties.
Whether you manage your tax preparation independently or work with a professional, taking the time to prepare properly can provide insights into your business’s financial health and set the stage for a successful year ahead. If you’re unsure about any aspect of the process, consult with a tax professional to ensure compliance and maximize your tax benefits.
Being proactive today can save you time, money, and stress as tax season approaches.
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