Best Practices for Small Business Taxes: How to Stop Guessing and Start Winning

Financial Horizons: Insights for Building Wealth and Securing Your Legacy

By Dr. Jose G. Cardenas, Chief Tax Strategist at The C & R Group, LLC

If you’re running a small business, you’re not just an owner—you’re also the CFO, bookkeeper, and tax department whether you like it or not.

Most small business owners don’t get crushed by competition. They get crushed by disorganization, bad records, and tax surprises that destroy cash flow. The good news? A few simple best practices can completely change the game.

In this edition of Financial Horizons, let’s break down five core tax habits every small business should master:

1. Hire the right tax professional
2. Keep a separate business bank account
3. Collect and save all your receipts
4. Correctly classify your business
5. Track your expenses and income like a real CEO

Get these right, and tax season stops being chaos and starts becoming just another step in your growth plan.

1. Hire the Right Tax Professional (Not Just the Cheapest Preparer)

Let’s be honest—if your entire tax strategy is “I’ll just upload my numbers to software and hope for the best,” you’re playing defense, not offense.

As a business owner, you don’t just need someone to type numbers into a form. You need:

• A strategist, not just a preparer
• Someone who understands your industry (contractors, clinicians, truckers, consultants, etc.)
• Guidance on entity structure, deductions, payroll, and estimated taxes

The right tax professional can help you:

• Avoid ugly surprises on April 15
• Stay out of trouble with the IRS and state agencies
• Design a plan to legally reduce taxes over time
• Integrate tax with your business growth and retirement strategy

Cheap, rushed tax help is expensive in the long run. Strategic tax help pays for itself in clarity, savings, and peace of mind.

2. Keep a Separate Bank Account for Your Business

If your business income and expenses are flowing in and out of your personal checking account, you’re setting yourself up for:

• Missed deductions
• Painful bookkeeping
• Messy audits
• Confusion about what’s actually profit vs. personal spending

A separate business bank account is non-negotiable. It helps you:

• See your business cash flow clearly
• Prove which expenses are truly business-related
• Make bookkeeping and tax preparation faster and more accurate
• Look more professional with clients, vendors, and lenders

If you’ve been mixing funds, don’t beat yourself up—just fix it now. Open a business account, route all business income and expenses through it, and give your future self a huge favor.

3. Collect and Save All Your Receipts

The tax code often allows more deductions than business owners actually claim—because they can’t prove them.

You should be saving documentation for:

• Online subscriptions and software
• Office supplies and equipment
• Travel, lodging, and qualifying business meals under current rules
• Mileage or vehicle expenses (using a proper log or app)
• Marketing, advertising, and professional services
• Training, certifications, and continuing education

No receipt = weak defense.
Receipt + clear business purpose = strong, legitimate deduction.

Use simple systems:

• A business credit/debit card dedicated to business expenses
• Cloud folders or apps where you snap photos of receipts
• Bookkeeping software that attaches documentation to each transaction

Think of receipts as money-protection documents. They protect the deductions you’re entitled to.

4. Correctly Classify Your Business

Your business structure and classification affect:

• How you’re taxed
• How you pay yourself
• What forms you file
• How easy it is to bring in partners, investors, or sell later

Common options include:

• Sole proprietorship
• Single- or multi-member LLC
• S corporation election (for qualifying businesses)
• Partnership
• C corporation (for certain growth strategies)

Each has pros and cons depending on:

• Your income level
• Whether you have employees
• Your growth plans
• Your need for liability protection and flexibility

Misclassification can lead to:

• Overpaying in self-employment or payroll taxes
• Filing the wrong forms
• Confusion when you bring in new partners or investors

You want your entity structure to match your current reality and future goals, not just whatever box you checked when you first started.

5. Track Your Expenses and Income Like a CEO

If your bookkeeping system is a shoebox, a spreadsheet you update once a year, or “I’ll figure it out at tax time,” you’re flying blind.

Accurate, up-to-date records help you:

• Know if your business is truly profitable
• Make better pricing and hiring decisions
• Prepare clean financials for lenders or investors
• File accurate tax returns without guessing

At a minimum, you should have:

• A bookkeeping system (software or a professional bookkeeper)
• All bank and card transactions categorized monthly
• Regular review of income, expenses, and profit
• A clear separation between owner draws/pay and business expenses

Remember: What gets measured gets managed.
If you don’t know your numbers, you can’t control your taxes—or your growth.

Bonus: Tax Best Practices Are Growth Practices

These best practices aren’t just about avoiding the IRS. They’re about building a real business, not just a hobby that sometimes sends you money.

When you:

• Hire the right tax strategist
• Separate business and personal finances
• Save receipts and document your deductions
• Choose the right entity classification
• Track income and expenses consistently

…you’re creating a business that can:

• Qualify for funding
• Attract buyers or partners
• Support your retirement and legacy
• Survive beyond your personal hustle

That’s how entrepreneurs move from self-employed chaos to scalable company.

🔗 Read more at: https://thecrgroupllc.com/financial-horizons

📅 Want help tightening up your small business tax game so you can focus on growth instead of guessing?
Book a consultation with Dr. Cardenas here:
https://api.leadconnectorhq.com/widget/booking/T4UHUjCijCtIB3rwoTDI

About the Author

Dr. Jose G. Cardenas is a retired U.S. Army Finance Officer and the Chief Tax Strategist at The C & R Group, LLC. With a Doctorate in Business Administration and over 20 years of experience in tax planning and financial strategy, Dr. Cardenas helps small business owners, entrepreneurs, and professionals legally reduce taxes, organize their financial systems, and turn their businesses into true wealth-building engines. Learn more at thecrgroupllc.com

📌 Disclosure

This article is for educational and informational purposes only and is not intended to serve as personalized legal, tax, or investment advice. Business structures, tax rules, and deduction eligibility vary by jurisdiction and change over time. You should consult with a qualified tax professional, legal advisor, or financial planner before making decisions about entity selection, deductions, or recordkeeping systems. Dr. Jose G. Cardenas, DBA, provides tax advisory services through The C & R Group, LLC. Insurance and investment strategies may be offered through his role as a licensed financial professional affiliated with Experior Financial Group.

#FinancialHorizons #SmallBusinessTaxes #TaxPlanning #EntrepreneurLife #Bookkeeping #BusinessStructure #TheCRGroupLLC #VeteranAdvisor #FML100M