Income Tax Forms for Your Small Business
This article was last edited on 12/20/2019. For updated information on small business income tax forms, visit https://www.irs.gov/businesses.
Federal income tax is a pay-as-you-go tax, so you’ll need to pay it as you earn income throughout the year. As an employee, your employer will make these payments for you. As a small business owner, however, you may need to make the payments yourself.
You may have to make quarterly estimated tax payments. You’ll need to do so if
- you expect to owe $1,000 or more in federal taxes
- your withholding will be less than the smaller of
- 90% of the tax shown on your current year’s tax return
- 100% of your previous year’s tax return
For most small businesses, the owner is responsible for paying the income tax, so you can calculate and pay your estimated taxes using Form 1040-ES, Estimated Tax for Individuals. You can make your payments by mailing a check or money order with a payment voucher (found on Form 1040-ES) or by paying online.
Read also: Tax Quarters: Do I Need to Pay Estimated Taxes and When?
Besides remitting your income tax payments, you’ll also need to report them to the IRS. The form you need to file will depend on your business’s tax entity type. Keep reading to learn which form(s) you’ll need to file.
Read also: How to Choose a Business Structure
If you operate your business as a sole proprietorship, your company’s income “passes through” to you, so you’ll report your profits or losses on Form 1040, U.S. Individual Income Tax Return. You’ll also need to file Schedule C (Form 1040), Profit or Loss From Business. These forms are typically due on April 15.
If you operate your business as a partnership, you’ll file Form 1065, U.S. Return of Partnership Income and Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc. These forms are usually due on March 15.
Like a sole proprietorship, the profits or losses of your partnership are “passed through” to the partners. Because of this, each partner will also need to file Form 1040 and Schedule E (Form 1040), Supplemental Income and Loss.
If your business is structured as a corporation, you’ll need to file Form 1120, U.S. Corporation Income Tax Return by April 15.
If you own an S Corp, you’ll file Form 1120S, U.S. Income Tax Return for an S Corporation and Schedule K-1 (Form 1120S), Shareholder’s Share of Income, Deductions, Credits, etc. These are typically due by March 15.
Like a partnership, each shareholder will also need to file Form 1040 and Schedule E (Form 1040).
Limited Liability Company (LLC)
If your company is an LLC, your tax forms will vary depending on what elections you’ve made. Generally, the IRS will treat your LLC as a partnership or sole proprietorship, unless you’ve filed Form 8832, Entity Classification Election, stating that you wish to be treated as a corporation.
If your LLC has two or more members, you’ll be classified as a partnership and will file Form 1065 and Schedule K-1 (Form 1065). Each member will file Form 1040 and Schedule E (Form 1040).
If you are the only member of your LLC, you’ll be treated as a sole proprietorship. You’ll report your company’s profits or losses on your own tax return using Form 1040 and Schedule C (Form 1040).