Business CPA

Summary of What This Blog Covers:

• Covers Strategic Tax-Saving Tips Specifically for S-Corporation Owners
  This blog walks S-Corp owners through essential tax strategies. From setting a reasonable salary to maximizing retirement contributions and leveraging fringe benefits, all designed to minimize tax liability and stay in compliance with IRS rules.
• Explains Compliance Essentials and Common Pitfalls to Avoid
  Readers learn the importance of separating personal and business finances, staying compliant in multiple states, and properly deducting expenses like health insurance and business travel. All areas that, if mismanaged, could trigger audits or penalties.
• Breaks Down Advanced S-Corp Planning Opportunities
  The blog highlights how to make the most of deductions like the Qualified Business Income (QBI) deduction, when to reconsider your S-Corp status, and how to handle tax forms like Form 2553, Form 1120-S, and Form 941 with confidence.
• Reinforces the Value of Working with a Specialized CPA
  It emphasizes why S-Corp owners benefit from working with a tax professional, specifically a CPA or enrolled agent experienced in S-Corp strategy, multi-state filings, and platforms like QuickBooks Self-Employed rather than relying on DIY tools or generic tax prep services.

Congratulations on taking the leap and electing S Corporation status. That move alone signals that you’re not just building a business, you’re building it smarter. But with that decision comes a new set of tax responsibilities (and opportunities) that can either save you a lot of money or cost you if you get them wrong.

We’ve seen both sides of that equation here at Insogna CPA, one of the top-rated Austin, Texas CPA firms supporting business owners in Austin, South Austin, Round Rock, and beyond. Whether you’re operating solo or running a fast-scaling team, knowing how to navigate S-Corp tax planning is a game-changer.

Here’s our expert take on the 10 tax tips every S-Corporation owner should know to stay compliant, save big, and stay ahead of the IRS curve.

1. Set a Reasonable Salary: The IRS Is Watching

One of the biggest perks of an S-Corp is reducing self-employment tax by paying yourself a reasonable salary and taking the rest of your income as distributions. But here’s the catch: you can’t just pay yourself $10K and take $200K in distributions.

Why It Matters:

• The IRS expects S-Corp owners who perform services for the business to receive W-2 wages.
• Too-low salaries can trigger audits and reclassification of distributions, along with back taxes and penalties.

What We Do:

• Help you determine a reasonable salary using industry benchmarks and your actual duties.
• Handle payroll setup in tools like Intuit QuickBooks, Gusto, or ADP.
• File your Form 941 and W2 forms quarterly and annually.

This is one area where you really need a certified public accountant near you who knows S-Corps inside and out.

2. Take Full Advantage of Retirement Contributions

As an S-Corp owner, you can use retirement accounts as both a tax-saving and wealth-building strategy. Options like a Solo 401(k) or SEP IRA allow you to make contributions as both the employee and the employer.

Tax Benefits:

• Employer contributions are deductible at the corporate level.
• Employee contributions reduce your taxable income on Form 1040.
• Tax-deferred growth means long-term savings for your future.

At Insogna CPA, our taxation accountants help you compare plans and optimize contributions based on your income level and business goals.

3. Keep Your Books Clean: Separate Business and Personal Finances

Mixing business and personal expenses is a no-no. Not just for tax purposes but for legal liability.

Here’s Why It Matters:

• You could lose your limited liability protection (piercing the corporate veil).
• Audit risk increases when financials aren’t clean.
• You could miss out on valuable deductions due to misclassified or untracked expenses.

Pro Tip:

Use tools like QuickBooks Self-Employed, ZohoBooks, or WaveApp to keep business income and expenses organized. If you’re looking for a small business CPA in Austin, we offer customized bookkeeping services near you with real-time QuickBooks syncing.

4. Maximize the Qualified Business Income (QBI) Deduction

One of the biggest gifts in the current tax code for S-Corp owners is the Qualified Business Income (QBI) deduction, also known as the Section 199A deduction.

What You Need to Know:

• You may be eligible to deduct up to 20% of your S-Corp income on your personal tax return.
• Eligibility depends on your income level, the nature of your business, and how your salary vs. distributions are structured.

We regularly run projections to help you optimize your compensation and keep your income within the QBI threshold. This is where having a tax advisor in Austin on your side makes all the difference.

5. Understand Multi-State Compliance If You Operate Beyond Texas

If you’ve hired remote workers, sell across state lines, or offer services in multiple jurisdictions, you may need to comply with multi-state filing requirements.

Common Requirements Include:

• Registering as a foreign LLC in states where you operate.
• Filing state income tax, sales tax, or franchise tax.
• Understanding each state’s nexus thresholds and composite filing rules.

How We Help:

We track your nexus exposure, file your registrations, and help you manage multi-state tax compliance with ease so you can focus on growing your business, not managing state-by-state filings.

If you’ve searched for a tax consultant or CPA office near you to help sort this out, we’ve got you covered.

6. Deduct Health Insurance Premiums: If You Do It Correctly

S-Corp owners are eligible to deduct health insurance premiums for themselves and their families but only if they’re reported properly.

Rules to Remember:

• Health insurance must be reported on your W2 form.
• The premium is deductible on your individual tax return.
• Failure to follow IRS procedures could disqualify the deduction.

Our tax preparers at Insogna CPA make sure your payroll and reporting systems are set up to track this correctly.

7. Don’t Forget About Business Deductions

Every business expense you miss is money you could have saved. S-Corps are eligible for a wide range of deductions that reduce taxable income, but only if you track them properly.

Common Deductions Include:

• Advertising and marketing
• Travel and lodging
• Business software subscriptions
• Legal and professional services
• Contractor payments via 1099 NEC

We help you categorize and document everything, using software integrations to simplify compliance. It’s a key part of our accounting services for small business clients.

8. Reassess Your S-Corp Election Periodically

Just because you’ve elected S-Corp status doesn’t mean it’ll always be your best structure. As your income grows or your ownership evolves, it may make more sense to consider C-Corp status or revert to LLC taxation.

When to Reevaluate:

• Revenue exceeds $500,000+
• You plan to raise investor capital
• You’re looking to retain earnings within the business

We hold year-end strategy sessions with our Austin small business accounting clients to review your financials and structure, ensuring your entity still supports your goals.

9. Use Fringe Benefits Wisely

Fringe benefits are perks that can enhance compensation while offering potential tax benefits if structured properly.

Examples Include:

• Company cars
• Educational assistance
• Childcare benefits
• Group term life insurance

Some fringe benefits are deductible at the business level and excluded from income; others must be reported as taxable income.

We’ll help you implement and track fringe benefits correctly, ensuring IRS compliance and optimizing your S Corporation tax strategy.

10. Work with a CPA Who Knows S-Corps Inside and Out

Let’s be honest: this is not DIY territory. From Form 2553 to Form 1120-S, from tracking self-employment tax savings to handling multi-state filings, you need a tax pro who speaks fluent S-Corp.

At Insogna CPA, We Offer:

• Certified tax accountants near you who specialize in S-Corp structures
• In-house enrolled agents and licensed CPAs
• Support for everything from FBAR filing to 1099-K reconciliation

We’re more than a tax preparer. We’re your long-term tax advisor in Austin.

Why S-Corp Owners Across Texas Choose Insogna CPA

We’re not just any CPA firm in Austin, Texas. We’re known for helping growth-minded business owners like you:

• Minimize tax liability legally
• Avoid IRS audits and penalties
• Set up and manage S-Corp payroll
• Comply with multi-state tax law
• Discover new opportunities with tax planning services

From franchise tax filings to QuickBooks Self-Employed integration, we handle it all with strategy, precision, and heart.

Let’s Build Your Best Tax Year Yet

Running an S-Corp is more than a tax election. It’s a commitment to smarter business. With the right guidance, you’ll avoid costly mistakes and unlock real savings.

Contact Insogna CPA today to schedule your tax strategy session. Whether you’re searching for a certified CPA near you, need tax help for self-employed businesses, or want a partner for multi-state compliance, we’re ready to help.

Because your business deserves more than a generic tax return. It deserves a custom strategy built for growth.

Running a business in multiple states is an exciting milestone—it means your business is growing and reaching new markets. But let’s be honest, managing taxes across state lines? That’s a whole different story. Each state has its own rules, deadlines, and tax-saving opportunities, which can quickly feel overwhelming.

If you’re feeling stuck, you’re not alone. At Insogna CPA, we help businesses like yours simplify multi-state tax compliance and unlock tax-saving strategies you may not even know exist. As a trusted Austin, Texas CPA, we specialize in breaking down the complexity so you can focus on what you do best: growing your business.

Here’s why working with a CPA who understands multi-state taxes is a must for your business.

1. Every State Has Its Own Tax Rules

No two states handle taxes the same way. Whether it’s franchise taxes, sales taxes, or income taxes, each state comes with its own regulations and deadlines. Trying to stay compliant without expert guidance can lead to missed filings and costly penalties.

Here’s Why You Need a CPA:

• We’ll track the specific tax requirements for every state where your business operates.
• We’ll stay ahead of filing deadlines, so you don’t have to stress about missing a due date.
• We’ll handle the paperwork to keep your business in good standing across state lines.

How This Helps You: You’ll avoid penalties, late fees, and the frustration of managing inconsistent tax laws.

2. Composite vs. Pass-Through Tax Rules Can Get Complicated

If your business is structured as an LLC, S-Corp, or partnership, understanding whether to use composite tax filings or pass-through taxation can be tricky. Choosing the wrong approach could mean overpaying on your taxes.

How We Make It Simple:

• We evaluate your business structure to determine the best tax filing strategy for each state.
• We help you understand the tax implications of composite filings vs. pass-through income.
• We handle the filings to ensure you’re compliant and saving money.

Why It Matters: A CPA in Austin can ensure you’re using the best strategy for your business, helping you keep more of your hard-earned money.

3. Staying Compliant Prevents Costly Penalties

Missing a filing deadline or failing to register in a state where your business operates can lead to hefty fines—and even legal trouble. Consistent compliance is critical for protecting your business.

How We Keep You Compliant:

• We track all your filing deadlines for sales tax, franchise tax, and income tax.
• We help register your business as a foreign LLC in states where you operate.
• We provide ongoing support to ensure you’re meeting all multi-state requirements.

What This Means for You: Peace of mind knowing your business is fully compliant and avoiding unnecessary risks.

4. A CPA Uncovers Tax-Saving Opportunities

Did you know many states offer tax credits, exemptions, or deductions specific to certain industries? Without a CPA, you could be leaving money on the table.

How We Save You Money:

• We identify state-specific tax credits and incentives that your business qualifies for.
• We review your nexus in each state to ensure you’re only paying taxes where required.
• We optimize your tax strategy to lower your overall tax burden.

Why It Matters: Saving money on taxes means more resources to reinvest in your business.

5. You Get Proactive, Year-Round Support

Taxes aren’t just a once-a-year task for multi-state businesses. They require constant attention to avoid surprises and stay ahead of deadlines. That’s where a CPA’s year-round guidance comes in.

How We Help You Stay Ahead:

• We provide monthly or quarterly check-ins to address upcoming deadlines.
• We offer strategic advice for expansion, restructuring, or growth opportunities.
• We keep you updated on changing state tax laws that could impact your business.

Why You’ll Love This: With ongoing support, you’ll always feel in control and confident in your tax strategy.

Why Work with Insogna CPA?

At Insogna CPA, we’re not just here to file your taxes—we’re here to be your long-term partner. Businesses across Austin, South Austin, and Round Rock TX trust us to handle the complexities of multi-state taxes.

Here’s what sets us apart:

• We Simplify the Process: From compliance to strategy, we make taxes stress-free.
• We Tailor Solutions to You: Every business is unique, and we create a plan that works for you.
• We’re Proactive: We help you plan ahead and avoid problems before they arise.

Let’s Simplify Multi-State Taxes Together

Managing taxes across multiple states doesn’t have to be stressful. Let Insogna CPA, one of the top CPA firms in Austin Texas, handle the complexity so you can focus on growing your business.

📞 Ready to get started? Contact Insogna CPA today for a consultation and see how we can help your multi-state business thrive. Let’s make taxes easy!

Expanding your business across state lines is a big milestone—congratulations! But let’s be real: keeping up with multi-state tax compliance can feel overwhelming. Between franchise taxes, sales tax permits, and registration requirements, it’s easy to miss a deadline or filing, and that can cost you in penalties or missed opportunities.

You’re not alone. At Insogna CPA, we help businesses like yours simplify multi-state tax compliance every day. As a trusted Austin, Texas CPA firm, we specialize in breaking down the complexity and giving you peace of mind. Let’s talk about why multi-state taxes are so challenging—and how we can make them easier for you.

Why Multi-State Tax Compliance Feels So Complicated

If your business operates in more than one state, you’re dealing with multiple sets of tax laws, deadlines, and obligations. Here’s why it’s such a challenge:

• Inconsistent Deadlines: Each state has its own filing schedule for franchise, sales, and income taxes, which makes it tough to track everything.
• Complicated Requirements: What’s required in one state may not apply in another. Keeping up with varying thresholds and rules can feel impossible.
• Risk of Penalties: Missing a filing or failing to register in a state where you operate can lead to hefty fines, interest, or even legal issues.

Sound familiar? It’s a lot to manage, but you don’t have to do it alone.

How Insogna CPA Simplifies Multi-State Compliance

At Insogna CPA, we specialize in helping businesses navigate multi-state tax challenges while identifying ways to save money along the way. Here’s how we’ll simplify your taxes and take the stress off your plate.

1. We Track State-Specific Filing Requirements for You

Every state has its own tax rules, and staying on top of them is critical to avoiding penalties.

How We Help:

• Identify where your business has nexus (a legal obligation to pay taxes due to your activities in that state).
• Track filing deadlines for all relevant taxes, including sales, income, and franchise taxes.
• Keep accurate records to ensure every filing is complete and accurate.

Why It Matters: With Insogna CPA managing your deadlines, you’ll never have to worry about missing a filing or facing penalties.

2. We Use Tax Planning Software to Streamline Compliance

Manually managing multi-state taxes is risky and time-consuming. That’s why we use advanced tax planning software to make the process efficient and error-free.

Here’s What It Does:

• Tracks your sales and revenue activity across states to identify tax obligations in real-time.
• Automates recurring tasks, like filing reminders and compliance reports.
• Provides centralized reporting, so you always know where your business stands.

Why It Matters: Automation reduces stress, saves time, and ensures accuracy.

3. We Provide Ongoing Support with Monthly Check-Ins

Multi-state compliance isn’t a one-and-done task. It requires regular attention, and that’s where we come in.

What We Offer:

• Monthly reviews to make sure your filings stay on track.
• Proactive advice on optimizing your tax strategy for multi-state operations.
• Real-time updates on changes in state tax laws that could impact your business.

Why It Matters: With monthly check-ins, you’ll always stay ahead of deadlines and avoid costly surprises.

4. We Handle Foreign LLC Registrations

If your business operates in states outside of Texas, you’ll likely need to register as a foreign LLC to stay compliant.

How We Help:

• File a certificate of authority in every state where your business operates.
• Appoint registered agents to handle correspondence in states that require them.
• Monitor ongoing compliance requirements for your foreign LLCs.

Why It Matters: Proper registration keeps your business legally operational and avoids penalties or disruptions.

5. We Uncover Tax-Saving Opportunities

Compliance isn’t just about following the rules—it’s also about finding ways to save money.

How We Save You Money:

• Identify tax credits, exemptions, or deductions available in specific states.
• Review your nexus in each state to minimize unnecessary tax liabilities.
• Provide tailored tax strategies that align with your business goals.

Why It Matters: By optimizing your tax strategy, you can reinvest those savings back into your business.

Why Businesses Like Yours Trust Insogna CPA

At Insogna CPA, we don’t just help you stay compliant—we help your business thrive. Here’s why businesses across Austin, South Austin, and Round Rock, TX choose us:

• We Simplify Complexity: From tracking deadlines to filing taxes, we handle the hard stuff so you don’t have to.
• We Tailor Solutions: Every business is unique, and we customize our approach to fit your needs.
• We’re Proactive: We don’t just react to problems—we help you avoid them entirely.

Let’s Take the Stress Out of Multi-State Taxes

You’ve got enough on your plate as a business owner. Let Insogna CPA, one of the most trusted CPA firms in Austin Texas, handle your multi-state compliance so you can focus on growing your business.

📞 Contact Insogna CPA today to schedule a consultation and see how we can simplify your taxes, save you money, and keep your business compliant. Let’s make tax season stress-free!

If you’re running a business in Austin, Texas, you already know how complex taxes can get. From franchise tax filings to sales tax compliance, it can feel like there’s always something to stay on top of. And if you’re trying to handle it all on your own, it’s easy to feel overwhelmed.

The good news? You don’t have to do it alone. At Insogna CPA, we specialize in making taxes simple for Texas-based businesses. Whether you’re managing sales tax permits, planning for growth, or navigating multi-state compliance, we’re here to help. Let’s walk through five ways we take the stress out of taxes so you can focus on growing your business.

1. We Handle Franchise Tax Compliance for You

Franchise taxes are part of doing business in Texas, but they can also be confusing. Every LLC in Texas is required to file franchise tax reports annually—even if you don’t owe any tax. Missing a filing could result in penalties, interest, or even losing your LLC’s good standing.

Here’s how we make it easy:

• We calculate whether your LLC owes franchise tax based on its revenue.
• We file your Public Information Report along with your franchise tax return.
• We track deadlines, so you never have to worry about missing one.

Why It Matters: Staying compliant with Texas franchise tax laws isn’t just about avoiding penalties—it’s about protecting your business’s reputation and keeping it running smoothly.

2. We Simplify Sales Tax Compliance

If your business sells taxable goods or services, managing sales tax is a big deal. Between getting the right permits, charging the correct rates, and filing reports on time, there’s a lot to keep track of.

Here’s how we help:

• We assist you with registering for a Texas sales tax permit.
• We make sure your invoices reflect the correct sales tax for your location.
• We handle your sales tax filings, ensuring everything is accurate and submitted on time.

Why It Matters: Staying on top of sales tax compliance protects your business from fines, audits, and unnecessary stress.

3. We Provide Proactive Tax Planning for Growth

Taxes shouldn’t just be about filing forms—they’re an opportunity to plan for your business’s future. Whether you’re thinking about hiring, expanding, or restructuring, proactive tax planning can help you save money and grow smarter.

Here’s how we support your growth:

• We identify tax-saving opportunities, like deductions and credits you might be missing.
• We help you decide if and when an S-Corp election is right for your LLC.
• We provide strategic advice to align your tax strategy with your long-term goals.

Why It Matters: With a proactive tax advisor in Austin, you can minimize your tax burden and make decisions with confidence.

4. We Help with Multi-State Tax Compliance

Does your business operate across state lines? If so, you’ll need to juggle multiple sets of tax regulations, including registering as a foreign LLC in Texas. This can get overwhelming, but we’ve got your back.

Here’s what we do:

• We guide you through registering as a foreign LLC with the Texas Secretary of State.
• We ensure your business complies with all multi-state tax requirements, including sales tax filings and income tax obligations.
• We provide ongoing support to keep you compliant in every state where you do business.

Why It Matters: Multi-state compliance ensures your business can legally operate anywhere without worrying about penalties or legal issues.

5. We Offer Year-Round Tax Advisory Services

Taxes aren’t just a once-a-year task. They require attention throughout the year to stay compliant, minimize liabilities, and take advantage of new opportunities. That’s why we’re here for you 365 days a year.

Here’s what we provide:

• Guidance on how changing tax laws affect your business.
• Ongoing support to help you make smart financial decisions.
• A trusted partner who’s always available to answer your questions.

Why It Matters: As one of the most trusted CPA firms in Austin, Texas, we make sure your business is always tax-ready and prepared for the future.

Summary of What This Blog Covers:

• Helps New LLC Owners Build a Strong Tax Foundation from Day One
  Learn why separating personal and business finances, tracking expenses properly, and setting up the right systems (like QuickBooks or FreshBooks) are essential for clean records, IRS compliance, and protecting your LLC’s legal structure.
  
  
• Covers Key State and Federal Filing Requirements for Texas LLCs
  Understand what’s required to stay in good standing with the Texas Comptroller, including filing the Franchise Tax Report and Public Information Report annually—even if you owe no tax—and how to avoid penalties or business suspension.
  
  
• Explains When and How to Make an S-Corp Election for Tax Savings
  Discover when it makes financial sense to have your LLC taxed as an S-Corporation, what IRS Form 2553 involves, and how it can reduce your self-employment taxes when done correctly—along with the responsibilities that come with it.
  
  
• Highlights the Value of Working with a Strategic, Year-Round CPA
  Learn why partnering with a certified public accountant or chartered professional accountant goes beyond tax filing. Helping you navigate 1099s, payroll compliance, capital gains tax, estimated payments, and long-term growth with expert guidance.

Starting a new LLC is a major milestone and if you’ve made that leap, congratulations. But now comes the part no one’s cheering about: taxes. For most new business owners, tax compliance feels overwhelming, confusing, and honestly, a little intimidating. You’re not alone.

At Insogna CPA, we’ve helped hundreds of startups and small businesses across Austin, Round Rock, and beyond build a rock-solid tax foundation. We know where entrepreneurs get tripped up and more importantly, how to help you avoid those pitfalls before they become expensive mistakes.

Whether you’re filing your first Form 1065, wondering if you need to track W9 tax forms, or hearing about S-Corp elections for the first time, this guide is built for you. Let’s walk through the five essential tax tips every new LLC owner needs to know plus a few bonus insights to help you hit the ground running.

1. Separate Business and Personal Finances Right Away

This is the single most important step you can take to protect your LLC and simplify your taxes. Commingling personal and business finances is one of the biggest mistakes we see. Not only does it make bookkeeping and tax prep difficult, but it can also expose your personal assets to legal risk by undermining the liability protection your LLC is designed to provide.

Here’s What to Do:

• Open a business checking account and use it exclusively for business-related income and expenses.
• Apply for a business credit card to build credit and clearly track business purchases.
• Keep documentation for any member capital contributions or owner draws so you can properly report them on your 1040 tax form or Form 1120S, depending on your election.

Even if your LLC hasn’t made much money yet, getting this structure in place early allows for cleaner books, a more professional image, and a stronger defense in the event of an audit.

When clients search for “CPA accountant near me” or “bookkeeping services near me,” they often come to us with months of commingled accounts. We help them untangle everything, set up systems in QuickBooks Online, FreshBooks, or ZohoBooks, and train them to keep it clean moving forward.

2. Implement Real-Time Income and Expense Tracking

If you’re waiting until April to tally up your receipts in a shoebox or search through bank statements for that one dinner with a client, you’re already behind. The IRS expects accurate recordkeeping and so do we.

By tracking income and expenses in real-time, you’ll:

• Maximize deductible expenses
• Avoid costly surprises
• Prepare quarterly estimated tax payments
• Streamline your year-end filings

Recommended Tools:

• QuickBooks Self-Employed for freelancers or solo LLCs
• WaveApp for cost-effective basic accounting
• ZohoBooks or FreshBooks for scalable cloud accounting
• Secure apps for saving receipts and uploading them directly to your accounting software

We’ll help you reconcile account payable and account receivable balances monthly, stay compliant with 1099 tax form filing rules, and even build out your chart of accounts to align with IRS guidelines.

From day one, you should be categorizing everything from advertising and subscriptions to mileage, meals, and office supplies. If it’s a business expense, it should be tracked and we’ll show you how.

3. Understand State and Federal Tax Compliance for Texas LLCs

Texas is often celebrated for its no personal income tax, but that doesn’t mean your LLC is tax-free. Every registered LLC in the state must file an annual Texas Franchise Tax Report, even if you made zero income. This filing is mandatory to keep your business in good standing with the state.

What You Need to Know:

• The Texas Comptroller requires annual filings of the Franchise Tax Report and Public Information Report (PIR).
• Revenue thresholds determine whether you’re required to pay franchise tax, but filing is required either way.
• LLCs making less than $1.23 million annually (as of 2024) generally owe no tax but must still submit the report.

Failure to comply can lead to penalties, late fees, and even forfeiture of your LLC’s charter.

We ensure your compliance by managing your state filings, tracking tax calendar deadlines, and alerting you if you reach a revenue threshold where payment becomes required.

If you’re unfamiliar with taxas requirements or you’ve Googled “tax places near me” or “CPA office near me USD”—we’ve got you covered.

4. Evaluate Whether an S-Corp Election Makes Sense

As your business becomes profitable—say, consistently earning $60,000 or more in annual net income—you may benefit from electing to have your LLC taxed as an S-Corporation.

Here’s why: standard LLCs are subject to self-employment tax on all profits (15.3%). By contrast, an S-Corp allows you to:

• Pay yourself a reasonable salary (which is subject to payroll taxes)
• Take the remaining profits as distributions (which are not subject to self-employment tax)

This election is made via IRS Form 2553 and can significantly reduce your overall tax liability.

But Be Prepared:

• You’ll need to set up payroll, issue W2 forms, and pay Form 941 and Form 940 payroll taxes quarterly.
• You’ll file a separate Form 1120S corporate return each year.
• You must maintain accurate books and distribute profits according to ownership percentages.

We guide you through the entire process. From filing Form 2553 to setting up Intuit QuickBooks Payroll, creating accounting packages for small business, and staying compliant with federal and state employment tax laws.

5. Work With a CPA Who Offers Year-Round Strategy Not Just Year-End Filing

Many first-time business owners make the mistake of hiring a tax preparer who only shows up once a year. But taxes are a year-round game and the best strategies happen in real-time, not after the fact.

Working with a certified public accountant or chartered public accountant who understands your business structure, growth goals, and compliance needs is essential.

What a Strategic CPA Will Help With:

• Quarterly estimated tax payments using Form 1040-ES
• Tax planning for high-revenue years, capital investments, and owner distributions
• Structuring deductions for healthcare, home office, meals, and travel
• Filing requirements like 1099-NEC, 1095-A, 1095-C, and 1099-K
• Advanced strategies including 1031 exchange planning, short term capital gains tax reduction, and foreign account (FBAR) reporting

If you’ve searched for “tax services near me”, “tax preparation services near me”, or “book keeping services near me,” what you really need is a partner who understands the full financial picture.

Insogna CPA clients have access to expert guidance from start to scale and everything in between.

Bonus Tip: Don’t Forget About Quarterly Estimated Taxes

This one catches a lot of new LLCs off guard. Even if you’ve just started generating income, the IRS may expect you to make quarterly estimated tax payments.

If you owe more than $1,000 in total taxes for the year, you’re required to prepay them in four installments. Failure to do so may result in underpayment penalties, even if you pay the full amount by the April filing deadline.

We calculate your estimated taxes using up-to-date financials and monitor them with QuickBooks Help, so you always know where you stand.

Let’s Launch Your LLC With Confidence

You didn’t start your business to become a tax expert but with Insogna CPA on your side, you don’t have to. From your first invoice to your first S-Corp salary, we’ll guide you with clarity, confidence, and practical insight.

Contact Insogna CPA today to schedule your new LLC consultation. We’ll walk you through everything—state filings, federal tax setup, estimated payments, and long-term strategy—so you can focus on growing your business.

Because building a business is bold. Your tax strategy should be, too.

Summary of What This Blog Covers:

• 🎯 Clarifies Which Services Are Taxable in Texas
  Learn the difference between taxable and exempt services like website design, IT support, and consulting; and why bundling them without proper invoicing can cost your business in back taxes.
• 🎯 Breaks Down the Risks of Sales Tax Mismanagement
  Understand the financial and legal consequences of not handling sales tax properly, including penalties, audits, and loss of compliance with the Texas Comptroller.
• 🎯 Outlines a 5-Step Framework for Compliance
  Follow a practical roadmap to stay compliant: classify your services, register for a sales tax permit, build a compliant invoicing system, file accurately, and keep up with law changes.
• 🎯 Connects Sales Tax to Other Essential Tax Forms and Tools
  Discover how sales tax reporting ties into W9s, 1099 forms, QuickBooks, and IRS documents like Form 1040, 1065, and 1120. Ensuring your business is aligned across all areas of tax compliance.

If you’ve been running a service-based business in Texas for more than a minute, you’ve likely asked yourself: “Wait, do I need to collect sales tax on this?” Maybe it came up when a client questioned your invoice. Or maybe you were browsing a Facebook group for business owners and saw a heated debate over whether web design or marketing services are taxable.

Either way, the confusion is real and entirely justified. Texas sales tax laws are complex, especially for businesses in the service sector. The line between what’s taxable and what’s exempt isn’t always clear, and it changes depending on how you structure your offerings, how you invoice clients, and whether you’re bundling services.

This guide will give you clarity. At Insogna CPA, we work with hundreds of service-based entrepreneurs across Austin, Round Rock, and South Austin, and we’ve seen firsthand how costly sales tax mistakes can be. We also know how to fix them, and more importantly, how to prevent them before they happen.

Whether you’re just launching your business, scaling your services, or trying to correct past tax oversights, you’ll leave this post with a strong grasp on how to manage Texas sales tax the right way. Backed by a team of experienced CPAs, bookkeepers, and compliance advisors.

Why Sales Tax Is So Tricky for Service Businesses in Texas

In most states, sales tax is pretty straightforward: you sell a tangible product, you collect sales tax. But when you offer services, especially non-physical digital or professional services, it gets complicated fast.

In Texas, only certain types of services are subject to sales tax, while others are exempt. This partial application of the tax code leads to widespread confusion and unfortunately, a lot of accidental noncompliance.

Examples of Taxable Services in Texas:

• Website design, development, and hosting
• Marketing and advertising services
• IT support and troubleshooting
• Data processing or information services
• Security monitoring services
• Telecommunications and voicemail services

Examples of Typically Exempt Services:

• Business consulting and coaching
• Legal and financial advisory
• Software development (if custom and delivered electronically)
• Education or training (depending on the delivery format)

The issue? Many businesses provide bundled services that cross the taxable/non-taxable line. For instance, if your web design package includes brand consulting, creative development, and tech support but the entire invoice isn’t itemized properly. You may be required to collect tax on the entire service, not just the taxable portions.

That small oversight can turn into a big tax bill.

What Happens If You Mismanage Sales Tax

Ignoring your sales tax responsibilities doesn’t make them go away. In fact, it can trigger a range of financial and operational risks that grow more severe the longer you go without addressing them.

1. You May Owe Back Sales Tax

If the state determines you should have been collecting tax and you weren’t, you’ll be liable for paying it out of pocket. That means dipping into your profits to cover past uncollected taxes without being able to recover those funds from clients.

2. Penalties and Interest Can Add Up Quickly

Texas imposes strict penalties for missed filings, late payments, and underreported collections. Penalties can reach up to 10% of the total tax due, plus interest charges that accumulate monthly.

3. You May Face a Sales Tax Audit

The Texas Comptroller routinely audits small businesses, especially those in high-risk categories like marketing, IT, or professional services. A red flag like inconsistent filing history or invoice errors can easily trigger an audit.

4. You Could Lose Compliance Standing

Falling out of compliance may affect your eligibility for state contracts, business licenses, and even your ability to maintain good standing with the Secretary of State.

Five Key Steps to Stay Sales Tax Compliant

Let’s walk through the five-step framework we use with our clients to ensure their businesses stay compliant and audit-ready.

Step 1: Classify Your Services Correctly

This is the foundation of everything. You need to understand exactly which services you offer and how they’re taxed under Texas law. Just because your work is digital or intangible doesn’t automatically mean it’s exempt.

We conduct a service classification audit for every new client. This involves:

• Reviewing your scope of work
• Evaluating how you deliver your services (in person, digital, bundled)
• Matching each offering to Texas’s list of taxable and exempt services

If you’ve been billing for website development, social media management, or paid advertising placement, there’s a strong chance you should be collecting sales tax.

Step 2: Register for a Texas Sales Tax Permit

If any portion of your services is taxable, you are required to register for a Texas Sales Tax Permit with the Comptroller’s office. This registration enables you to legally collect and remit sales tax. Skipping this step is a violation even if you’re not actively collecting tax.

We handle all aspects of your permit application, ensuring you:

• Register under the correct business structure (LLC, S Corporation, etc.)
• Set up your accounting software to record taxable sales
• Understand your filing frequency (monthly, quarterly, annually)

Step 3: Set Up Your Invoicing and Accounting System

Many sales tax errors come down to poor invoicing practices. If your invoices do not clearly separate taxable and non-taxable services, the state may treat everything as taxable.

We help you build a compliant invoicing system using software like:

• Intuit QuickBooks
• QuickBooks Self-Employed
• FreshBooks
• ZohoBooks
• WaveApp

We also ensure you’re properly using account payable and account receivable systems to match your revenue with tax obligations, which is essential for audit protection.

Step 4: File and Remit Sales Tax on Time

Collecting sales tax isn’t enough. You must also remit it to the state on a consistent schedule and file accurate returns. Your due dates depend on your revenue, but even small businesses are often required to file quarterly.

Late payments trigger penalties and interest, and underreporting even unintentionally can result in audit flags.

We offer:

• Monthly or quarterly sales tax filing services
• Deadline tracking
• Integrated reporting from tools like TurboTax Online, QuickBooks Help, or Tax Act
• Review of cross-referenced tax forms like 1040 tax form, 1099 NEC form, 1099K, or Form 1099-R

Step 5: Stay Ahead of Law Changes and Industry Shifts

Tax law isn’t static. New rulings, definitions, and exemptions are introduced regularly. A service that was exempt last year might be taxable now or vice versa.

We provide:

• Ongoing updates to clients about relevant changes in Texas tax law
• Adjustments to your QuickBooksonline sales tax settings
• Support in responding to notices from the Comptroller or IRS
• Strategic tax guidance when expanding services, hiring, or changing business structure

How Sales Tax Connects to Other Key Tax Forms

Your sales tax compliance should coordinate with other filings and forms you’re already handling. Here’s how:

• W9 Tax Form: Ensure contractor records align with 1099 reporting and sales tax remittance.
• 1099 Tax Form: Properly track contractors who receive taxable payments through your business.
• Form 2553: Elect S Corporation status to potentially reduce self-employment tax, but verify how it impacts your sales tax structure.
• 1040 ES: Helps estimate your income and self-employment tax, factoring in sales tax collections.
• Form 1065 or 1120: Corporate and partnership returns must match your gross sales and collected tax amounts.
• Self-Employment Tax Calculator: Useful in projecting quarterly tax liability when paired with state tax obligations.

Why Service Businesses Choose Insogna CPA

When you’re searching for a CPA office near you, you need more than a tax preparer. You need a strategic partner who understands how your service business operates and offers hands-on, proactive guidance.

Here’s what makes Insogna CPA the go-to choice for service providers:

• Certified CPA and Chartered Professional Accountant experience
• Deep understanding of Texas franchise tax, sales tax, and federal reporting
• Seamless integration with accounting softwares like QuickBooks, FreshBooks, and Wave Accounting
• Trusted by businesses looking for bookkeeping services near me, accounting firms near me, and year-round support

We’ve helped clients navigate audits, avoid penalties, and recover from non-compliance. All while building streamlined tax systems that grow with their business.

Contact us today to schedule your sales tax consultation. Let’s build a strategy that protects your business, keeps you compliant, and frees you to focus on what you do best.