What Do Sole Proprietors (Schedule C Businesses) Need to File by the October 15 Extended Deadline?

Before you know it, the extended deadline in October is upon us. This is the

filing deadline for individual taxpayers, which includes Sole Proprietors (Schedule C filers). Below is a list of things to consider if you are a business owner who files taxes as a Sole Proprietor and is under a valid filing extension.

What to file by October 15

• Federal return: File Form 1040 with Schedule C (business income/expenses). Filing by October 15 under a valid extension avoids the failure-to-file penalty, even if you can’t pay in full.

• Maryland return: File your Maryland individual tax return that includes your Schedule C income.

• Separate filings that are NOT covered by your personal extension: sales and use tax returns, payroll tax deposits/returns, and business license renewals. Keep those on their regular (often monthly or quarterly) schedules.

What records you should have ready

• Income: 1099-NEC/1099-K, invoices, bank and processor reports (Stripe, Square, PayPal), plus any cash logs.

• Expenses: receipts or digital records for supplies, software, advertising, insurance, professional fees, subcontractors, and rent. If you pay contractors, confirm you collected W-9s and issued 1099s back in January.

• Vehicle and home office: mileage log (business miles, total miles), home office square footage and total home square footage, plus utilities, rent, and internet.

• Assets: equipment/vehicle purchases with dates placed in service to evaluate depreciation considerations, such as Section 179 or bonus depreciation.

• Taxes paid: dates/amounts of federal and Maryland estimated payments and any extension payments. Accurate application of these avoids overpaying at the last minute.

If you can’t pay the full amount when you file

• File on time and pay what you can. This limits penalties. Failure-to-file is generally much harsher than failure-to-pay.

• IRS payment options: you can consider requesting a payment plan for the tax balance owed. Note, that these can come in different forms - i.e installment agreement term.

• Maryland payment options: the Comptroller offers payment plans as well. The important thing is to get in touch with the tax agency and setup a plan, rather than doing nothing.

• Consider penalty relief: based on your compliance history and other factors, you may be able to request penalty relief with the IRS or Maryland.

• Don’t forget next year: adjust your 2026 estimated taxes so you’re not in the same spot next October.

When to call a professional instead of DIY

• You have mixed income streams (consulting plus product sales), inventory, or large equipment purchases that may benefit from Section 179 or bonus depreciation.

• You use a vehicle and home office and want to optimize deductions correctly.

• You have messy books and need help getting your business financials organized and ready for tax prep

• You missed or underpaid estimates and need help minimizing penalties and setting up payment plans.

• You’re wondering if switching to an S corporation could be more advantageous than operating as a sole proprietorship

How Aventa Tax helps busy owners

Located in Germantown, MD our team of small business accountants specializes in providing business tax services, including tax filing for sole proprietors and single-member LLCs. Our tax accountants can assist you with:

• Rapid extension-to-filing support: our team can help with cleaning up your books, finalizing Schedule C, and e-filing federal and Maryland returns before October 15.

• Payment plan guidance: we can help you set up the right IRS and Maryland payment options, as well as map out next year’s estimated taxes.

• Proactive planning: we can provide year-round tax planning for small business owners, such as evaluating whether an S corporation election for a future year makes sense for your income level and industry.

If you’re a sole proprietor in Germantown, Rockville, Silver Spring, Bethesda or anywhere nearby and need help with tax filing, Aventa Tax can handle your Maryland small business tax preparation, file accurately, and set up a practical plan if you can’t pay in full. Call our office at 301-235-2724 or learn more about our business tax services today so you can file on time, reduce penalties, and move forward with confidence.

Disclaimer: This information is for educational purposes only. Please consult a tax professional for specific advice on your situation.