LoopyLuci Tax Planning for Small Business
Planning taxes for small businesses — from entity structure selection and quarterly estimated taxes through deductions, credits, and year-end strategies.
When to Use
- Setting up tax structure for a new business
- Planning estimated quarterly tax payments
- Identifying deductible business expenses
- Preparing for tax filing season
- Choosing between LLC, S-Corp, and C-Corp
Tax Considerations
ENTITY_STRUCTURES = {
'sole_prop': 'Simplest, self-employment tax on all income, personal liability',
'llc': 'Flexible, pass-through taxation, liability protection',
's_corp': 'Salary + distributions, self-employment tax savings, more compliance',
'c_corp': 'Corporate tax rate, double taxation on dividends, best for investors',
}
COMMON_DEDUCTIONS = [
'Home office (exclusive + regular use)',
'Vehicle mileage (standard rate 65.5¢/mi for 2023)',
'Health insurance premiums (self-employed)',
'Retirement contributions (SEP IRA, Solo 401k)',
'Software and subscriptions',
'Professional services (legal, accounting)',
'Business meals (50% deductible)',
'Travel and lodging',
]
def estimate_quarterly_taxes(projected_income: float, entity: str) -> float:
se_tax = projected_income * 0.153 * 0.5 # Employer portion
income_tax = projected_income * 0.25 # Estimated rate
return round((se_tax + income_tax) / 4, 2)
Verification Checklist
- Entity structure chosen (LLC, S-Corp, C-Corp)
- EIN obtained
- Quarterly estimated taxes calculated and paid
- Business bank account separate from personal
- Receipts organized (digital + physical)
- CPA/tax advisor engaged for review
- Payroll set up if S-Corp or employees
- Sales tax registration (if applicable)