Taxes for New Small Business Owners
By Chris Brown, Enrolled Agent
We had a great experience, I highly recommend! Super responsive and went way above and beyond helping straighten out some business tax expenses. I am super confident that our taxes were done correctly and that he found all our eligible savings and rebates.
The first year of a business is when good tax habits are cheapest to build and most expensive to skip. You do not need to get everything perfect. You do need to get a few things right early.
Pick a structure, then get an EIN
You can start as a sole proprietor and report on Schedule C right away, or form an LLC for liability protection. A single-member LLC is still taxed like a sole proprietorship by default, so the choice is more about legal protection than taxes at the start. Either way, get an EIN from the IRS. It is free and keeps your Social Security number off business paperwork.
Separate your money on day one
Open a business checking account and run every business dollar through it. Clean books are the difference between claiming every deduction you earned and guessing in April. This one habit saves more first-year owners than any single deduction.
Plan for taxes nobody is withholding
As an owner you have no paycheck withholding, so you owe income tax and the 15.3% self-employment tax directly, in quarterly estimated payments. Setting aside roughly 25–30% of net profit as you go is a safe starting point until your real numbers come into focus.
Know New Hampshire’s business taxes
New Hampshire does not tax wages, but it does tax business activity through the Business Profits Tax and Business Enterprise Tax once you pass their thresholds. Most brand-new businesses start below them. The small business tax guide covers how they work, and we can tell you whether you are close to a filing requirement. Call when you want a second set of eyes on the setup.
Talk to your tax professional today
No forms, no phone trees. Reach Chris directly about your tax situation.
Frequently asked questions
Do I need an LLC to start a business?
No. You can operate as a sole proprietor and report income on Schedule C from day one. An LLC adds liability protection and some flexibility, but on its own it does not change how a single-owner business is taxed federally.
How much should I set aside for taxes my first year?
A common starting point is to set aside roughly 25–30% of net profit for federal income and self-employment tax, then adjust once you have real numbers. Your bracket, other income, and deductions all move that figure.