Business Structure
Tax Tips for Brand-New Businesses in Their First Year
The habits you set in year one echo for years. Get these tax basics right early and you'll save yourself expensive cleanup later.
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01Which business structure should you choose?
Sole proprietorship, LLC, or S-Corp each carry different tax and liability consequences. The default isn't always best, and a quick professional conversation upfront can shape years of savings.
02Track Startup Costs From Day One
Money spent before you officially open (research, legal setup, initial marketing) can often be deducted or amortized. Capture it now; reconstructing it later is painful.
03Get an EIN and Separate Accounts
An EIN and dedicated business banking establish a clean line between you and the business, which matters for both taxes and liability protection.
04Set Up Bookkeeping Before You Need It
Starting with clean books beats reconstructing a year of transactions in April. Pick a system early and use it consistently.
05Plan for Self-Employment Tax
First-time owners are often blindsided by self-employment tax and quarterly payments. Set money aside from the first dollar so it's never a shock.
Common questions
Which structure should a new business choose?
Sole proprietorship, LLC and S-Corp each carry different tax and liability consequences, and the default is not always the best fit. A short professional conversation before you register settles it while it is still easy to change.
Can I deduct money spent before the business opened?
Often, yes. Research, legal setup and initial marketing spent before opening can be deducted or amortized within the limits the IRS sets. Capture the figures now; reconstructing them later is painful.
What surprises first-year owners most at tax time?
Self-employment tax and the quarterly payments that come with it. Set money aside from the first dollar so the first payment is never a shock.
Have a question about your situation?
Book a free 30-minute consultation and we'll walk through it together.
Schedule a ConsultationThis article is general information, not individualized tax, legal, or financial advice. Every situation is different. Reach out and we'll look at yours directly.