Small Business Income Tax

Income Tax Forms for Your Small Business

As much as we wish we only had to think about taxes once a year, you have to think about your company’s income tax year-round. Federal income tax is a pay-as-you-go tax, so you pay it as you earn income throughout the year.

Estimated Tax Payments

You must pay quarterly estimated taxes, if

  • you expect to owe $1,000 or more in federal taxes, and
  • your withholding will be less than the smaller of
    • 90% of the tax shown on your current year’s tax return or
    • 100% of your previous year’s tax return.

For most small businesses, the owner is responsible for paying the income tax, not the business, so you can calculate and pay your estimated taxes using Form 1040-ES, Estimated Tax for Individuals.

You can pay your quarterly estimated tax by mailing a check or money order with a payment voucher (found on Form 1040-ES) or by paying online.

Estimated Tax Due Dates

For the period: Due Date:
January 1 – March 31 April 18, 2017
April 1 – May 31 June 15, 2017
June 1 – August 31 September 15, 2017
September 1 – December 31 January 16, 2018*

*If you file your 2017 tax return by January 31, 2018 and pay the remainder of your balance due with the return, you don’t have to make the January 16, 2018 payment.

Sole Proprietorship

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, and Schedule C (Form 1040), Profit or Loss From Business or Schedule C-EZ (Form 1040), Net Profit From Business.

You must file your 2017 tax return by April 17, 2018.

Partnership

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.

Form 1065 and Schedule K-1 are due March 15, 2018.

Like a sole proprietorship, the profits or losses of your partnership are “passed through” to the partners. Because of this, each partner will file Form 1040 and Schedule E (Form 1040), Supplemental Income and Loss.

Corporation

If your business is structured as a corporation, you’ll file Form 1120, U.S. Corporation Income Tax Return by April 17, 2018.

S Corporation

If you own an S Corporation, 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.

Form 1120S and Schedule K-1 are due March 15, 2018.

Like a partnership, each shareholder will 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. The IRS will treat your LLC as partnership or a disregarded entity, 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’re the only member of the LLC, you’ll be treated as a disregarded entity for income tax purposes. In other words, your income will “pass through” to you. You’ll report your company’s profits or losses on your own tax return, using Form 1040, and Schedule C (Form 1040) or Schedule C-EZ (Form 1040).