There are five general types of business taxes that small businesses must file at the end of the tax year. The business you operate determines which of the following taxes you must file.
All businesses except partnerships, who must file an information return, must file an annual income tax return. The form your business use to file its tax returns depends on the structure of your business. There are five common business structures; if you operate one of these businesses, the form you must file is stated below:
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Types of Business |
Income tax forms to file |
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Partnership |
1065 U.S Return of Partnership Income |
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Sole Proprietorship |
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.
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Corporation |
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S Corporation |
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Limited Liability Company (LLC) |
A LLC business is treated as either a partnership, corporation or as a disregarded entity (a part of the LLCs owner’s tax return. A LLC will with two or more members will be treated like a partnership, unless the owners file Form 8832, which indicates that it is a corporation. |
Federal income tax as a pay-as-you-go status, which means that the tax is paid when income is received or money is earned. As an employer, you must withdraw income tax from your employee’s pay. If your business does not pay enough taxes or pay its taxes through the withholding method, you may be required to pay what is known as an estimated tax. If the IRS does not make you pay estimated taxes, you will have to pay all taxes owed when you file your returns.
Estimated taxes are taxes businesses must pay if they do not pay taxes through the withholding process. Estimated taxes are paid is paid on dividends, income, rent, alimony, self-employment, gains made from asset sales, awards and prizes.
Individuals who work for themselves must pay self-employment tax, SE tax a Medicare and social security tax. Your SE tax is a contribution to your coverage under the social security system, which in turn provides working individuals with disability, retirement and survivor benefits, as well as, Medicare coverage. It is not an option; all self-employed individuals must file Schedule SE (Form 1040) and pay their Self-employment tax if you meet any of the requirements below:
● If you work for church or a qualified church-controlled organization who is exempted from taxes, but you earn $108.28 or higher from the organization.
● If you make $400 or more as net earnings from your self-employed income.
As a business owner and an employer, you have a responsibility to pay employment taxes and there are forms you must complete to show that you are paying these taxes. There are three different types of employment taxes:
● Social Security Tax and Medicare taxes
● Federal unemployment (FUTA) tax
● Federal income tax withholding
There are some businesses that must pay Excise Tax. Below you will learn who must file excise tax and the forms you must use to file them. All companies who do any of the following must file excise tax:
● Operate certain kinds of businesses
● manufacture or sell certain products
● receive payment for certain services
● use various equipment, facilities, or products
Filing File 720 - There are several broad categories of taxes that must be reported on the Form 720. Some of the categories include:
● Communications and air transportation
● Environmental taxes
● Tax on the first retail sale of heavy trucks, trailers and tractors
● Fuel taxes
Form 730 - Businesses who conduct a lottery, a wagering pool or accept wages may need to file Form 730 federal excise tax on wagering.
Form 2290 - Certain trucks, buses and tractors used on public highways must pay a federal excise tax. This tax, however, only applies to vehicles whose gross weight is 55,000 pounds or more. This tax must be reported using Form 2290.
Form 11-C - This form, the Occupational Tax and Registration Returns for Wagering is used to register all wagering activities and also to pay the necessary taxes allotted.
There are several general excise tax programs such as the excise program for motor fuel for businesses to use.
Filing your business’s federal income tax is a big deal. The IRS does not take lightly to errors you may make on your tax returns. If you do not have the time or is afraid you may miss something that is very important when filing your small business tax returns, hire a competent agent such as East West Accounting Services, LLC to file your taxes for you and provide you with information every step of the way.
East West Accounting Services LLC|
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