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Useful tips to prepare your small business for the 2022 tax season

Small Business Tax Guide 2022                                                              

Follow these tips to maximize your return, and minimize stress this tax season!  

Tax season is quickly approaching, and small business owners everywhere are preparing for the stress that comes with paying taxes. 

Small business owners must be careful to file their business tax return correctly, as filing errors can lead to costly penalties and audits. 

In order to get the best tax return possible, and avoid any costly mistakes, it’s best to approach tax season with your affairs in order. In the guide below, we’ve assembled important tax tips and created a checklist to help you prepare for your small business taxes. 

By following this guide you’ll save yourself a huge headache, and find a useful tip (or two) to maximize your tax return. 

Note: The following tips are for small businesses filing with the IRS (United States)

Know Your Tax Filing Deadlines




Missing important filing deadlines can be costly and lead to penalties. Small business owners must be on top of their filing deadlines in order to receive the best tax return. Whether you are filing your taxes with an accountant or on your own, you must know your filing deadlines. 

In some cases, there are options to shift filing deadlines due to the Covid-19 pandemic. If your small business will be unable to file on time, you can request a filing extension with the IRS, expanding filing deadlines through to Oct 17th.

Also in response to the Covid-19 pandemic, the IRS will begin accepting and processing 2021 tax returns as early as Jan 24th.

Small business filing deadlines for the 2022 tax season:

January 31: All employee wages and non-employee compensation forms (1097, 1098, 1099, 3921, 3922, W-2 and W-2G)

March 15: Deadline for federal income tax return for partnerships and S corporations that follow a calendar year

April 18: Deadline for corporations and sole proprietors filing as individuals to submit their 2021 calendar year federal income tax return

Depending on how your business is legally structured, and whether you follow a fiscal or calendar year, your tax deadlines may differ. It’s best to contact your accountant to be sure of your specific filing deadlines.

COVID-19 Considerations




 Covid-19 has brought about many new (and confusing) tax regulations thanks to multiple business relief programs created throughout the pandemic. 

With many of these relief programs now expiring, small businesses will be required to report these funds on their 2021 federal tax returns.

As you are preparing your 2021 business taxes, remember to consider the following:

Paycheck Protection Program (PPP)

  • If you used your Paycheck Protection Program loan for regular business expenses, you can deduct that amount from your 2021 taxes. 
  • PPP loan forgiveness is non-taxable income and excluded from your gross income.

Extended Employee Retention Credit

  • You may be eligible for tax credit if your business was suspended due to government orders and mandates or, 
  • If you saw a reduction in gross receipt of 20% or more

Economic Injury Disaster Loan (EIDL)

  • The EIDL is non-taxable 
  • Valid business expenses paid with the EIDL are fully deductible

Small business owners must properly report all Covid-19 relief funds on their 2021 tax return. 

Follow this cheat sheet to identify further relief programs, grants, and tax credits that are applicable to your business, and how to report them.

Understanding Tax Deductible Business Expenses

As the owner of a small business, sole proprietorship or LLC, there are multiple business expenses that can be deducted from your taxable income. 

Why do deductible business expenses matter? 

With these deductions you can lower your income tax and reduce your taxable self-employment income. If you’re looking to decrease your business taxes, deductions will quickly become your best friend.

Hiring a trusted CPA to file your business tax return is the best way to ensure you’re leveraging every opportunity to lower your taxes. It is important to understand which expenses can be deducted, as you will be required to bring receipts and documentation to your accountant.

Common business expenses that are tax deductible include:

  • Office expenses, such as: rent, utilities, office supplies
  • Health insurance
  • Work related meals and 
  • Business travel expenses, including flights, hotels, etc.
  • Phone bill for business phone line

The IRS provides a full list of tax credits applicable to small businesses, and the necessary forms needed to make a claim. 

Tax credits and deductions are incredibly important for small businesses and merchants, because in many cases you may be shocked to learn that certain fees are in fact deductible.

Are my credit card processing fees tax deductible? 

Yes! Your credit card processing fees are deductible and can be treated as a business expense. 

Many merchants and small business owners are unaware that their credit card processing fees can be counted as a business expense. The IRS considers all “necessary” business expenses tax deductible, and your processing fees fall into this category. 




While initially your processing fees may seem small, they can quickly add up throughout the year. Consider a rate review if you notice your processing fees are building up quickly. Aside from investing in an affordable payment processing solution, small businesses should be deducting their payment processing fees to save money. 

Credit card fees that are tax deductible for small businesses include:

  • Transaction fees, and PayPal fees associated with business sales
  • Interest accrued on business expenses
  • Annual credit card fee 
  • Cash advance fees, balance transfer fees, and foreign transaction fees

How to deduct and report credit card processing fees

All credit card processing fees and related credit card fees must be included on Schedule C of your form 1040. There is no limit for how much you can claim, and 100% of your credit card processing fees can be deducted from your taxes. 

Be sure to organize your receipts, credit card statements and other documents that reflect your credit card processing fees. Use proper accounting software to stay on top of your financial reports, and record your fees throughout the year. 

It’s best to consult with a CPA or other tax professional for assistance with filing business taxes and claiming necessary deductions.




Small Business Tax Return Checklist

Keeping your tax season free of stress starts with a dedicated effort to organize your documents. While hiring a CPA is one of the best ways to easily navigate your business tax return, you still need to provide your accountant with the necessary documents. 

In order to file your small business taxes, your accountant or tax professional will require the following information:

  • Your basic personal information (SSN, EIN, contact information, etc.)
  • Previous year’s tax return 
  • Your business financial reports including:
  • Balance Sheets
  • Profit and Loss reports or the Income Statement
  • Cash flow statements
  • The following business tax forms:
  • Partnerships: 1065, 940, 941, 943
  • S Corporations: 1120-S, Schedule K-1, 940, 941, 943
  • Limited Liability Corporations (LLCs): 1065, 1120-S, Schedule K
  • Single Member Limited Liability Corporations: 1040, Schedule C, Schedule E, Schedule F
  • Sole proprietors: 1040, Schedule C, Schedule C-EZ, 1040-SE
  • All your business assets:
  • Bring receipts related to any business assets you’ve sold, bought or depreciated throughout the year
  • Loan information:
  • All information on business loans, loan payments, and accrued interest. Remember to bring information on any Covid-19 related loans and credits, which we’ve listed above.
  • Income records 
  • Expense records:
  • All expense receipts, bills, bank statements, credit card statements, mortgage interest and property taxes 
  • Payroll reports and data
  • Information on stocks and bonds
  • COGs (Cost of Goods Sold) and Inventory counts
  • Provide both opening and closing inventory counts for the year
  • All deductible expenses information

You will be required to bring the above forms to your accountant in order to get your taxes on the roll. The necessary forms will vary depending on your business type, so be sure to check the full list of forms and instructions for filing that are available on the IRS website.

Are You Ready for Tax Season?

It’s true that approaching business taxes can be a confusing and stressful affair. Hopefully, with the help of the resources and checklist above, you can sail through the upcoming tax season with ease. 

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