Small Business Tax Preparation: A Checklist for North Carolina Owners

By the Latorre & Company team, enrolled agents admitted to practice before the IRS
Published November 8, 2026 · 8 min read

Small business tax preparation is mostly done before anyone opens tax software. By the time a return is prepared in March, the income has been earned, the equipment bought and the owner has already been paid one way or another. What is left is putting the year on paper correctly, with records that hold up if the IRS asks.

We prepare business returns for sole proprietors, LLCs, partnerships and corporations across North Carolina, many of them in Spanish. This checklist is what we ask new business clients to bring, in the order we use it. For how our engagements run, see our business tax preparation page.

Which return does your business file?

The IRS guide to business taxes says the form of business you operate determines which taxes you pay and how you pay them. All businesses except partnerships file an annual income tax return; partnerships file an information return, and the income passes through to the partners. For a business on a calendar year, the federal returns line up like this:

IRS Publication 509 sets the partnership and S-corporation due date at the 15th day of the third month after the tax year ends, and Form 7004 gives an automatic six-month extension to file. An extension moves the filing date, not the payment date. Because the K-1s from a partnership or S-corporation feed the owners’ personal returns, those business returns have to be finished first.

The small business tax preparation checklist

Bring or upload these. If we already keep your books, most of the list is done before you call.

Income

• Bank and credit card statements for all twelve months, for every business account
• Sales records: invoices, point-of-sale reports and payment processor reports (card processors, payment apps)
• Any Forms 1099-NEC, 1099-MISC or 1099-K you received
• Cash income, recorded somewhere other than your memory

Expenses

• Receipts or a categorized expense report for supplies, rent, utilities, insurance, phone and software
• Vehicle records: business miles, or actual costs if you use that method
• Home office measurements, if a space is used only for the business
• Loan statements showing interest paid (the principal is not deductible)

Assets

• Invoices for equipment, vehicles, computers and furniture bought or sold during the year, with dates
• Last year’s depreciation schedule, usually in the back of last year’s return

People

• Payroll reports for the year, the four quarterly Form 941s, Form 940 and the W-2s
• A list of contractors you paid, with their Forms W-9, and the 1099-NECs you issued
• Owner pay: the salary an S-corporation owner took through payroll, and any draws or distributions

Payments and history

• Dates and amounts of every federal and North Carolina estimated payment
• Last year’s federal and state returns, if you are new to the preparer
• Any IRS or North Carolina Department of Revenue notices received during the year
• Formation documents and the EIN letter, for a business in its first year

The five kinds of federal business tax

The IRS groups business taxes into five types. Most small businesses deal with three or four of them:

1. Income tax. Paid on profit, by the business or through the owners’ personal returns.
2. Estimated tax. The pay-as-you-go payments made during the year (next section).
3. Self-employment tax. Social Security and Medicare for people who work for themselves. You generally owe it and file Schedule SE if your net earnings from self-employment were $400 or more.
4. Employment taxes. Social Security and Medicare, federal income tax withholding and federal unemployment (FUTA) tax, once you have employees.
5. Excise tax. Specific to certain products and activities. The one our trucking clients meet is Form 2290, the federal tax on highway vehicles with a taxable gross weight of 55,000 pounds or more.

Self-employment tax is where entity choice shows up in real money. A profitable LLC taxed as a sole proprietorship pays it on all of its net profit, which is why we review whether an S-corporation election would cost less. That conversation belongs in the fourth quarter, not in March.

Estimated tax payments

Federal income tax is due as you earn the money. According to the IRS page on estimated taxes, individuals, including sole proprietors, partners and S-corporation shareholders, generally have to make estimated payments if they expect to owe $1,000 or more when they file. Corporations generally have to if they expect to owe $500 or more.

For individuals, Publication 509 puts the payments on the 15th day of the 4th, 6th and 9th months of the tax year and the 15th day of the month after it ends: mid-April, mid-June, mid-September and mid-January for a calendar year. The IRS says most taxpayers avoid the underpayment penalty if they owe less than $1,000 after withholding and credits, or paid at least 90% of this year’s tax or 100% of last year’s, whichever is smaller. Higher-income taxpayers have a different rule, which is one more reason to look at the year before it ends.

Bring the dates and amounts of every payment you made. A payment that is missing from the return becomes a balance-due notice that we then have to answer.

North Carolina items to have ready

The federal return is only half of it. North Carolina has its own income tax returns, and corporations, including S-corporations, also owe the state franchise tax, which is based on net worth and has a minimum even for small companies. LLCs taxed as partnerships or sole proprietorships do not pay it.

If you sell taxable goods, have your sales and use tax returns for the year at hand. In Charlotte and the rest of Mecklenburg County this year has two rates in it: the North Carolina Department of Revenue announced an additional 1% county tax effective July 1, 2026, which moved the combined general rate from 7.25% to 8.25%, with new return forms for periods starting on or after that date. If your point-of-sale system was updated late, the first months after July are where to look for a mismatch between what you collected and what you owed.

Can you do your business taxes yourself?

Yes. Nothing requires a business to use a paid preparer, and a sole proprietor with clean books and simple expenses can file Schedule C with consumer software. It gets harder with payroll, partners, depreciation, an S-corporation owner’s salary, or income in more than one state.

If you pay someone, the IRS guide on how to choose a tax return preparer says a paid preparer must sign the return and include their preparer tax identification number (PTIN), and that you remain accountable for every item on it. Choose someone you will be able to reach if the IRS examines the return. Our post on bookkeeping services costs covers the other half of the job: keeping books that make the return straightforward.

How we prepare a business return

• Books first. If we keep your books, the return starts from reconciled financials. If not, we review or clean up the records first and tell you what that costs before we begin.
• Fourth-quarter planning. We project the year and go through equipment purchases, retirement contributions, owner salary versus distributions and estimated payments while there is still time to act.
• A second review. Every return is reviewed by a second person, explained to you and then e-filed with the federal and state returns.
• K-1s on time. Partnership and S-corporation returns are scheduled so owners have their K-1s for their personal returns.
• A fixed fee. We quote it after seeing last year’s return and your current financials.
• Spanish or English. From the questionnaire to the signature page.

We work from our office in Matthews, serving the Charlotte area, and by video with business owners across North Carolina. Bring last year’s return to a free consultation, or start with our business tax preparation page.

Business tax questions