Your first year in business: the tax checklist
In your first year, get an EIN, open a business bank account, choose bookkeeping software and track every expense from day one. Set aside 25% to 30% of profit, make quarterly estimated payments, check whether you need sales tax or payroll accounts, and note your filing deadline for next spring.
Updated November 2026 · By Pankil Kumar, Managing Partner
Quick facts
- Day one. EIN, business bank account and bookkeeping
- Each quarter. Pay estimated tax on profit
- Next spring. March 15 or April 15, depending on entity
What should you do in your first month?
- Choose your business structure.
- Register with your state, if needed, and get any local licenses.
- Get a free EIN.
- Open a business bank account and card. Keep it separate.
- Set up QuickBooks Online or Xero, or a simple spreadsheet if you're tiny.
- Save receipts for what you've already spent. Startup costs are deductible.
What should you do every quarter?
- Set aside 25% to 30% of profit
- Pay estimated tax in April, June, September and January, when you need to
- Reconcile your accounts at least monthly
- Check your sales by state if you sell across state lines. Nexus can surprise you
What should you check as you grow?
| If this happens | You'll need |
|---|---|
| You hire someone | Payroll setup |
| You pay a contractor | W-9, then a 1099 |
| You sell taxable goods | A sales tax permit |
| You make solid profit | An S-Corp check |
| You add a partner | A new tax form |
When is your first return due?
Sole proprietors and single-member LLCs file Schedule C with Form 1040 by April 15. Partnerships and S-Corps file by March 15. C-Corps file by April 15. You can extend the filing, but not the payment. Your state may have its own deadlines, and our deadline calendar lists the federal ones.
What do first-year owners usually get wrong?
- Thinking they don't owe until next April
- Treating revenue as take-home pay
- Not tracking mileage from the start
- Forgetting state annual reports
- Paying for a BOI filing they don't need
- Leaving bookkeeping until February
None of these is hard to fix in month two, and all of them are harder in month fourteen. If you'd like it done for you, we can form the LLC, get the EIN and set up your books.
Sources
- IRS: Small business and self-employed tax center
- IRS Publication 583: Starting a business and keeping records
- SBA: Launch your business
General information, not tax advice for your situation.
Starting a business?
We form the LLC, get the EIN and set up your books.
See our LLC formation serviceWhen do I start paying taxes on a new business?
Usually with your first quarterly estimated payment after you're profitable, though first-year safe harbors may apply.
Do I have to pay taxes if my business lost money in year one?
You generally won't owe income tax on a loss, but you may still need to file, and a loss can offset other income.
What is the best way to track business expenses?
A separate business card connected to bookkeeping software, with receipts photographed as you go.
Tell us what's messy. We'll tell you what it takes.
Tell us what you need and get a fixed price before any work starts. No pressure and no contract.