AI Prompts for Small Business Tax Prep

"I run a small [Type of Business, e.g., freelance graphic design] business from my home. Act as a tax advisor and provide a comprehensive list of 15 potential tax deductions that are specific to my industry and working situation. Include common ones (home office, internet) but focus heavily on lesser-known or easily missed deductions (e.g., software subscriptions, continuing education). *Disclaimer: Remind me to consult a CPA.*"

"Explain the tax differences between operating as a Single-Member LLC versus electing S-Corporation tax status. Break the explanation down into simple terms. Cover how self-employment taxes work in both scenarios, the concept of paying yourself a 'reasonable salary', and the additional payroll/administrative overhead required for the S-Corp. Provide a hypothetical financial example showing at what profit level an S-Corp election usually saves money."

"Create a comprehensive, step-by-step 'End of Year Tax Preparation Checklist' for my bookkeeping software. Separate the checklist into phases: 1. Reconciling Accounts, 2. Gathering Documents (1099s, W-2s, receipts), 3. Catching up on specific compliance tasks (e.g., issuing 1099s to contractors). I want to hand my CPA a flawless file so I don't get billed for hourly cleanup."

"I just started a freelance business and expect to make $[Estimated Income] this year. Explain the concept of Quarterly Estimated Taxes to me like I am 5 years old. Include the standard IRS due dates (April, June, Sept, Jan), the penalty for underpayment, and a safe-harbor strategy (e.g., the 100% of last year's tax rule) to ensure I don't get hit with a surprise penalty at year-end."

"Here is a list of 10 recent business expenses for my [Industry] company: [List 10 varied expenses, e.g., Client lunch, new laptop, Facebook Ads, parking ticket]. Tell me exactly which standard IRS 'Chart of Accounts' category each expense should be mapped to in Quickbooks (e.g., 'Meals & Entertainment', 'Office Equipment', 'Advertising'). Explicitly point out any items on my list that are NOT legally tax-deductible."

"Explain the two methods for calculating the Home Office Tax Deduction: The 'Simplified Method' and the 'Regular Method'. I use a [Square Footage] sq ft room exclusively for business in my [Total Home Square Footage] sq ft home. List the exact expenses I need to track if I use the Regular Method (mortgage interest, utilities, repairs). Explain the 'exclusive and regular use' rule so I don't trigger an audit."

"I am hiring my first worker. Explain the strict IRS criteria for classifying someone as an Independent Contractor (1099) versus an Employee (W-2). Use the IRS's three categories: Behavioral Control, Financial Control, and Type of Relationship. Give me 3 examples of scenarios that clearly cross the line into W-2 territory (e.g., demanding they work 9-5 at my office)."

"Draft a professional, friendly email template to send to vendors and freelance contractors requesting they fill out a W-9 form before I can process their invoice. Explain briefly that this is a strict compliance requirement from our accountant for year-end 1099 filing. Provide clear instructions on how to submit it securely."

"As a small business owner, I want to 'audit-proof' my business this year. Give me a 5-step operational framework for maintaining bulletproof records. Cover receipt retention rules (digital vs physical), the strict documentation needed for business meals/travel (who, what, when, where, why), and why keeping a dedicated business bank account is the most critical step to avoid the 'hobby loss' rule."

"Explain the two ways to deduct business vehicle expenses: the Standard Mileage Rate vs. the Actual Expenses method. I drove 15,000 miles total this year, and 8,000 were for business. Explain the strict mileage logging requirements (odometer readings, date, purpose) and outline factors that might make one method better than the other for my situation."

"I am interviewing a new CPA for my small business. Provide a list of 8 targeted interview questions to ask them. Include questions that vet their experience in my specific industry, their philosophy on aggressive vs. conservative deductions, how they communicate throughout the year (not just in April), and how they handle audit defense."

"My startup operated at a net loss of $[Amount] this year. Explain the concept of a Net Operating Loss (NOL) and how loss carryforwards work under current tax law. Explain in simple terms how taking a loss this year can offset my taxable income in future profitable years to reduce my tax burden down the road."