Small Business Filing 101: What Stays and What Goes?
Aside from when you first set it up, the most important time to file forms for your business is when taxes are due. The structure of your business will help determine which forms you need to file at tax time. Use this guide to get a general idea of the forms you may be responsible for and to get help with your tax preparation.
Types of Business Taxes
Small business owners may need to file business tax forms that include yearly income tax returns, estimated tax forms, and employment taxes. Employment taxes consist of the employer's portion of Social Security and Medicare taxes, income tax withholdings, and federal unemployment taxes. They may also need to pay excise taxes.
Annual Income and Estimated Taxes
C and S corporations should look at either Form 1120 U.S. Corporation Tax Return or Form 1120S U.S. Income Tax Return for an S Corporation during tax preparation for an annual return and at Form 1120-W Estimated Tax for Corporations for estimated taxes. In addition, if you are a shareholder to an S corporation or part of a partnership, then you will also need to file a Schedule E Supplemental Income and Loss form with your Form 1040 and a 1040-ES with your personal estimated taxes. Those who are part of a partnership should file Form 1065 U.S. Return of Partnership Income for their annual return. Those involved in a partnership may also need to factor in self-employment taxes during their tax preparation.
Business Taxes for Employers
Businesses of all types need to include the same three forms in their tax preparation if they hire employees. These include Form 940 Employer's Annual Federal Unemployment (FUTA) Tax Return, Form 941 Employer's Quarterly Federal Tax Return, and Form 943 Employer's Annual Federal Tax Return for Agricultural Employees. In addition to these forms, employers also need to fill out a W-2 for each employee and send the form to the respective employee and the Social Security Administration. The same goes for Form 1099 if businesses hire independent contractors.
There are several excise tax forms that a business may need to include in its tax preparation. These include Forms 11-C Occupational Tax and Registration Return for Wagering, 720 Quarterly Federal Excise Tax Return, 720-CS Carrier Summary Report, 720-T0 Terminal Operator Report, 730 Monthly Tax Return for Wagers, 1363 Export Exemption Certificate, 4136 Credit for Federal Tax Paid on Fuels, 6197 Gas Guzzler Tax, 6478 Credit for Alcohol Used as Fuel, 6627 Environmental Taxes, 8864 Biodiesel Fuels Credit, 2290 Heavy Highway Vehicle Use Tax Return, and 8849 Claim for Refund of Excise Tax.
You will need to include the same paperwork in your tax preparation as a corporation, partnership, or sole proprietor depending on what elections you make and how many members you have. You may need to file Form 8832 if you want to change your classification for business tax purposes.
One of the biggest things that catch new business owners by surprise during tax preparation is that they may be required to file estimated quarterly taxes. This helps keep payments lower but means you must deal with filing more than once a year. To keep from owing penalties due to surprises like this, make an appointment with a qualified CPA that knows about small business taxes.