đź’Ľ Tax Talk: Common Tax Lingo Every Small Business Owner Should Know
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Running a small business is an exciting venture but when it comes to taxes, you may feel out of your depth. From tax jargon to figuring out how you should file taxes for your business, knowing what you’re looking at will help you feel more confident in your endeavors. To ease this part of your business, we've put together a list of common tax terms and tips every entrepreneur and small business owner should know, leading into our tax talk informational session with the IRS on July 9, 2025.
đź“š Tax Terms You Should Know (and Understand)
1. Pass-Through Entity
A pass-through entity (like an LLC, S corp, or partnership) doesn’t pay corporate tax. Instead, business income "passes through" to the owners' tax returns.
Why it matters: Depending on your setup, you’ll report business profits on a Schedule C or K-1.
2. Estimated Tax Payments
These are quarterly payments made to the IRS to cover income and self-employment tax throughout the year.
Tip: Avoid IRS penalties by following the safe harbor rule (pay at least 100% of last year’s tax bill or 110% if you made over $150K).
3. 1099-K vs. 1099-NEC
1099-K: Applies if you earned income via third-party platforms (like Venmo, PayPal, Etsy).
1099-NEC: Applies if you’re paid over $600 by clients as an independent contractor.
4. Depreciation
This is how you deduct the cost of big business purchases (like equipment or vehicles) over time.
Tip: Use Section 179 to write off full costs upfront, instead of spreading deductions over several years.
5. Qualified Business Income Deduction (QBI)
If you operate a pass-through entity, you may qualify for a 20% deduction on business income.
Heads up: Not all income qualifies, especially for service-based businesses with high earnings.
6. Tax Credits vs. Tax Deductions
Deductions reduce your taxable income.
Credits reduce your actual tax bill dollar for dollar.
Tip: Explore the Clean Energy Tax Credits or the Work Opportunity Tax Credit (WOTC) if hiring new employees.
7. BOI Reporting (Corporate Transparency Act)
Most small businesses must file Beneficial Ownership Information (BOI) reports with FinCEN. It’s about disclosing who owns and controls your company.
Penalty: Noncompliance could cost $500/day. Make sure you're up to date!
âś… Quick Tips for Staying Tax-Ready
Digitize your bookkeeping: Use platforms like QuickBooks or Xero.
Keep receipts organized: Apps like Expensify help track deductible expenses.
Track all income: Especially from payment apps or side hustles.
Talk to a tax pro: Even if you DIY, getting expert advice can save you money (and stress).
📅 Don’t Miss Our Free Small Business Tax Event: July 9th
Want to go beyond the basics? Join us for a free informational tax session tailored to small business owners and entrepreneurs! Black Orlando Tech has partnered with the IRS to expand on tax saving tips, common terms, and to answer your tax questions.
Small Business Tax Talk 2025: Trends, Tips & Tools
🗓️ Date: Tuesday, July 9, 2025
đź•• Time: 12 noon - 1 p.m.
đź“Ť Location: Online event
🎟️ Free admission – RSVP required
âś… Crash course in tax lingo
âś…Practical tips to maximize your deductions
âś… Ask questions directly to a CPA
👉🏾RSVP to reserve your spot!
Conclusion
You don’t need to become a tax expert to run a small business. Understanding key tax terms and how they apply to you can help you run a more profitable, stress-free business. With constant changes in rules and regulations for small business owners, it’s a great time to educate yourself and gain insightful tax strategies. Ready to level up your tax know-how? Join us on July 9th and take control of your financial future. Your business deserves it!
