Small business tax preparation in Lone Tree, CO

Which return your business files

The form follows how the business is taxed, which is not always how it was registered with the Colorado Secretary of State.

Sole proprietors and single-member LLCs

An LLC with one owner is disregarded for federal income tax unless it elects otherwise, so the business goes on Schedule C of the owner's personal return, due April 15. Profit carries self-employment tax on top of income tax. The common write-offs are in the small business deductions checklist, and the home office deduction has its own rules.

Partnerships and multi-member LLCs

Form 1065 is due March 15 for a calendar-year business, a month ahead of the owners' personal returns, because each owner needs a Schedule K-1 from it to finish their own. The late-filing penalty is charged per partner for each month late, up to 12 months, and it applies even when the partnership owes no tax. A two-owner LLC that files three months late owes it six times: two partners for three months each.

S corporations

Form 1120-S is also due March 15. The corporation usually pays no federal income tax itself; profit passes to shareholders on K-1s. The extra work is payroll. An owner who works in the business has to take a reasonable salary with withholding and quarterly payroll filings before taking distributions.

When an S-corp election pays off

S corporation distributions above a reasonable salary are not subject to the 15.3 percent self-employment tax. Against that saving you pay for payroll, a separate corporate return every year, and a salary figure the IRS expects to hold up for your role. Those costs stay roughly flat while the savings grow with profit, so a business netting $30,000 usually gains little and one well into six figures often gains a lot. The break-even depends on the salary your work justifies, and we run it against your actual numbers before you file the election.

What changed for 2026

The federal tax law signed in July 2025 made the 20 percent qualified business income deduction permanent. It covers profit from sole proprietorships, partnerships, and S corporations, with limits for higher-income owners of service businesses such as consulting and financial services. Equipment bought after January 19, 2025 is eligible for 100 percent bonus depreciation again.

The 1099-NEC threshold rose from $600 to $2,000 for payments made in 2026. A business that pays a contractor $1,500 this year no longer sends a form, although the contractor still owes tax on the money.

Town licenses are a separate filing

Several south metro towns license businesses and collect their own sales tax, and none of it appears on an income tax return. The rules differ by town: Parker requires a license even of businesses that collect no sales tax, Castle Rock charges use tax on materials bought outside town, and Centennial addresses often carry another city's name. Highlands Ranch is unincorporated and has no municipal license at all.

If the books are not ready by March

File Form 7004 by March 15 and a partnership or S corporation gets six more months, to September 15. Owners waiting on a late K-1 will need to extend their personal returns too, and any personal tax they owe is still due April 15.

Questions from business owners