Why small business owners need to stay on top of taxes all year long — and how to do it

This article was paid for by Intuit QuickBooks.

There’s a reason so many business owners invest in an accountant or tax professional: Close to a quarter (23%) worry about underpaying the IRS, according to a 2026 QuickBooks survey, while 12% are concerned they're giving too much.

More than a third (34%) worry about both risks equally.

Anything that affects your business — from revenue and expenses to payroll and insurance — can impact your tax situation. That’s why it's critical to keep current with financial reporting and estimated taxes throughout the year, said Roman Villard, founder of Boulder, Colorado, accounting firm Full Send Finance. “It's a constant effort, versus a once-per-year event when you're filing your taxes.”

While you should tap a professional to handle your return, having a better understanding of the process will make it easier.

Below, CNBC Select shares helpful tips and common mistakes when tackling business taxes.

There’s no single time of the year to think about your taxes. As a proactive business owner, you should always be keeping an eye on your monthly and quarterly liabilities. That way, you’ll be better able to make decisions that reduce how much you owe at tax time and avoid IRS penalties or audits. Accounting software like Intuit QuickBooks tracks business expenses all year and makes claiming deductions simple. 

Your tax strategy depends on what kind of business you have — a partnership, sole proprietorship, LLC, C-corp or S-corp — and how much your business generates in a year. 

“A good starting point is to check in on your finances daily or weekly to ensure they are being reconciled,” said Villard, a QuickBooks Pro Advisor. “We work alongside our clients in QuickBooks Online to help them get the most out of their financials for accurate guidance and decision-making, as well as preparedness for maximizing their tax strategies.”

• Keep personal and business expenses separate. A dedicated credit card and deposit account for your company can avoid mistakes when claiming deductions.
  
• Track expenses in real-time and categorize transactions monthly. This includes any marketing, machinery, software and office supplies you may deduct at tax time. 
  
• Maximize contributions to retirement plans. If you have a Simplified Employee Pension (SEP) IRA or Solo 401(k) plan, this will enable you to make the most of the programs’ tax advantages.
  
• Pay taxes quarterly. Business owners should make estimated quarterly taxes if they expect to owe $1,000 or more during the quarter. QuickBooks can calculate those payments, helping you manage cash flow and avoid penalties. 
  
• Consider forming an S-corp or LLC.  You may be eligible for the Qualified Business Income Deduction, which lets eligible filers deduct up to 20% of qualified business income.
  
• Review inventory and recently purchased equipment.  You can write off obsolete or damaged goods and take advantage of accelerated depreciation for eligible purchases like laptops, software, office furniture and business-use vehicles.
  
• Scan and save important documents. Hold onto receipts, contracts, mileage logs and other documents for at least three years in case of an audit.
  
• Check in with your accountant. You’ll ensure you’re following best practices and minimize errors on your return.

There’s no one-size-fits-all tax strategy, so Villard says to do your research before getting started.

“It's easy to fall prey to aggressive and often misleading social media tax strategies,” he told CNBC Select. “Ultimately, working with a professional will ensure your strategy is aligned with your situation and risk tolerances.”

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