Best Practices for Small Business Owners: Get Set Up for Long-Term Success

Happy National Small Business Week! From May 5–11, 2025, we’re celebrating the millions of small business owners who drive innovation, create jobs, and power local communities across the country. Whether you’re a seasoned entrepreneur or just starting out, now is a great time to explore the tools and tips the IRS has put together to help you manage your tax responsibilities, protect your business, and plan ahead.

Here’s what you should be doing now to set yourself up for success:

✅ Choose the Right Business Structure

Before you do anything else, make sure your business is set up under the proper legal structure. Each type—sole proprietorship, partnership, corporation, S corporation, or LLC—has its own tax filing requirements, legal responsibilities, and pros and cons. Take time to evaluate your current setup. If you're not sure what's best for you, consider consulting a tax advisor or accountant who specializes in small businesses.

🔢 Apply for an EIN (Employer Identification Number)

Think of your EIN as your business's Social Security number. It’s required for things like opening a business bank account, filing taxes, and hiring employees. The good news? You can apply for an EIN for free directly through the IRS website and get it instantly. Just make sure to check whether your state also requires a separate number or registration.

🧾 Keep Solid Financial Records

Good bookkeeping isn’t just for tax time—it’s the foundation of a successful business.

Maintaining clear, accurate records will help you:

• Monitor your business’s performance

• Track income and deductible expenses

• Prepare accurate tax returns

• Justify items in case of an audit

Choose a system (digital or paper) that works for you, and keep it consistent.

👩‍💼 Hire the Right Tax Pro

Your tax preparer is one of your most important business allies. Look for a licensed professional with experience working with businesses like yours.

Pro tip: Don’t be afraid to ask questions about credentials, pricing, and experience. And always watch out for red flags like promises of huge refunds or refusal to sign your return.

💸 Handle Tax Debt the Smart Way

If you owe back taxes, don’t ignore it—the IRS offers several options to help you resolve what you owe:

• Installment Plans: Spread out payments over time

• Offer in Compromise: Settle for less than the full amount if you qualify

• Temporary Delay: Postpone collection due to financial hardship

• Spouse Relief: If a joint return has errors from your spouse

• Bankruptcy Relief: Let the IRS know if you’ve filed

The key is communication. Always contact the IRS if you can’t pay right away—they’re more flexible than many business owners realize.

📆 Plan Ahead for Next Year

Avoid surprises at tax time by paying as you go. You can either:

• Have taxes withheld from your paycheck (if you receive wages), or

• Make estimated quarterly tax payments if you’re self-employed or own a business

Check out the IRS Tax Withholding Estimator and get ahead for next year.

Staying on top of these best practices will give you peace of mind, reduce the risk of penalties, and keep your business in good standing.

Pro tip: Consider using tax software like MyTAXPrepOffice if you work with as a tax professional. It helps streamline return prep, manage client records, and stay compliant—all in one easy-to-use platform. Need help with next steps? Reach out to a trusted tax advisor or visit IRS.gov/smallbiz for more resources.

Let this Small Business Week be your reminder to stay informed, proactive, and prepared!

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Disclaimer: This article is for informational and educational purposes only and does not constitute legal tax advice. Advanced Tax Solutions is not liable or responsible for any damages resulting from or related to your use of this information. It is your responsibility to refer to official IRS documentation for information regarding any tax laws or tax information shown here.