Business Tax Forms Overview
New business owner? Be sure and file these tax forms.
For many business owners, the thought of doing your business' taxes is downright intimidating. Most people are unsure where to begin, and want to leave the number crunching to their tax accountant. Online filing software has made filing your own taxes easier than ever. If you’re a new business owner, it’s a good idea to use this guide to become more familiar with what form(s) you may be required to file.
S-Corporations, Partnerships, and Sole Proprietorship owners all have their own respective forms to file. Some returns tend to be a little less complicated than others. For example, S-Corporations and Partnerships have to file separate tax returns on behalf of the entity in addition to their personal returns while a sole proprietor uses their personal individual income tax return and a schedule to report their business income.
Here’s a look at some of the most commonly used forms.
1120S - U.S. Income Tax Return for an S Corporation
Form 1120S is the main form that S-Corporations will use to report items such as income, gains, losses, deductions, credits, and other information on behalf of the corporation.
This form also includes Schedules B, K, L, M-1, and M-2.
Schedule B - Other Information. This part of the return includes information regarding the accounting method of the corporation, whether or not 1099’s were filed, and other various details.
Schedule K - Shareholders’ Pro Rata Share Items. Schedule K is a summary schedule of all shareholders’ shares of income, deductions, credits, etc.
Schedule L - Balance Sheets Per Books. The Balance sheets should match the corporation’s books and records. This schedule is not required if the corporation answered yes to question 10 on Schedule B.
Schedule M-1 - Reconciliation of Income (Loss) per Books With Income (Loss) per Return. This schedule is not required if the corporation answered yes to question 10 on Schedule B.
Schedule M-2 - Analysis of Accumulated Adjustments Account, Shareholders’ Undistributed Taxable Income Previously Taxed, Accumulated Earnings and Profits, and Other Adjustments Account - This is an analysis of unappropriated retained earnings.
Form 1120S is due on March 15th.
1120S K-1 - Shareholder’s Share of Income, Deductions, Credits, etc.
Otherwise known as the K-1, this form is where the S-Corporation will report each shareholder's individual income. Information for this form is derived from Schedule K on the 1120S. This form can be broken down into three parts.
The first part is where you will find identifying information about the corporation itself. In the second part is where you will find identifying information about the shareholder. Finally, the third part is where you will find the shareholders share of income, deductions, credits and other items.
An S-Corporation will need to distribute a copy of the K-1 to each of the shareholders by the 1120S filing date, March 15th.
You will also need to attach a copy of each K-1 to the 1120S.
1065 - U.S. Return of Partnership Income
Form 1065 is the main form that partnerships use to report items such as income, gains, losses, deductions, credits, and other information on behalf of the partnership.
Much like the 1120S form that S corporations use, the 1065 also includes Schedules B, K, L, M-1, and M-2.
Schedule B - Other Information. This schedule starts with what type of partnership is filing the return and has a series of questions regarding the partnership that follows.
Schedule K - Partner's’ Distributive Share Items. A summary of all the partners’ shares of the income credits, deductions, etc.
Schedule L - Balance Sheets Per Books. Balance sheets should match the partnership's books and records.
Schedule M-1 - Reconciliation of Income (Loss) per Books With Income (Loss) per Return.
Schedule M-2 - Analysis of Partners' Capital Accounts.
Form 1065 is due on March 15th.
1065 K-1 - Partner’s Share of Income, Deductions, Credits, etc.
This form serves the same purpose as the s corporation K-1. This form is where the partnership will report each partner's individual income. Information for this form is derived from Schedule K on the 1065. This form can be broken down into three parts.
The first part is where you will find identifying information about the partnership itself. In the second part is where you will find identifying information about the partner. Finally, the third part is where you will find the partners share of income, deductions, credits and other items.
A partnership will need to distribute a copy of the K-1 to each of the shareholders by the 1065 filing date, March 15th.
You will also attach a copy of each K-1 to the Form 1065.
Sole Proprietors differ from corporations and partnerships in that they don’t file a separate return for the business. Instead, the profit and loss from the business are reported on Schedule C which is then reported on the owner's individual income tax return, Form 1040.
Schedule C - Profit or Loss From Business
This form has all of your business's information on it. There are five parts to the schedule. Part one is used to calculate gross income. The second part of Schedule C is used to figure your expenses. Cost of goods sold is on part three. Vehicle information is part four. The final section of Schedule C is where you list other expenses.
Several different taxes fall under this tax type. They generally include Unemployment, Social Security & Medicare, and Self-Employment tax. Most business owners will be subject to these taxes with a few exceptions. For example, S-Corporation owners typically will not have to pay Self-Employment taxes since the business technically employs them.
IRS Form 940 - Employer’s Annual Federal Unemployment Tax Return (FUTA)
FUTA Tax is a tax that funds the federal government’s unemployment for each state. It is only imposed on the employer and is generally taxed at a rate of 6% of the first $7,000 you pay to each employee. Most businesses receive a 5.4% credit and typically pay at a rate of 0.6%.
The due date for filing Form 940 is January 31st. However, if your payment is made in full by the due date, the due date is extended to February 11th.
IRS Form 941 - Employer’s Quarterly Federal Tax Return (FICA)
Per the Federal Insurance Contribution Act, FICA tax is a mandatory payroll tax. FICA tax is a combination of Social Security and Medicare taxes. This tax is split by the employer and employee, both paying at a rate of 7.65% for a total of 15.3%. It is important to note that this is a QUARTERLY return, not annual.
Form 941 is due April 30th, July 31st, October 31st, and January 31st.
Schedule SE - Self Employment Tax
Schedule SE is used by self-employed persons (sole proprietors and partnerships) to pay self-employment taxes. Owners use this form and are subject to the full 15.3% of income. Schedule SE is a part of filing your 1040.
Schedule SE is included with your individual income tax return is due, April 15th.
Filing your own taxes as a business owner may seem daunting - and it can be. Using Halon Tax offers business owners a safe, secure, and thorough solution to filing business and individual income returns. Our tax team offers experience, solutions, and availability to ensure your returns are filed correctly.
While this is a list of some of the most commonly used forms, it is not a comprehensive list. Owners may need to file additional schedules or forms. Most states require pass-through entities to file an informational return in addition to your federal forms. Check our state-by-state guides for more information on your specific state's requirements here.
And don't forget, Halon Tax can prepare and file all of these forms for you. We are the low price leader in business tax preparation. To learn more click here.