What is a business tax return?
If you own a business, you need to file a company tax retort. A clientele tax return reports your ship’s company ’ mho income, tax deductions, and tax payments. All businesses must file tax returns. And, you are responsible for filing your return annually with the IRS to calculate your business ’ randomness tax indebtedness .
The particular form you file depends on your type of clientele entity and which deductions you claim on the restitution. For exemplar, you may be able to claim the home office tax deduction by attaching Form 8829, Expenses for Business Use of Your Home, depending on your business .
How to file a business tax return
Again, tax render forms vary by business social organization. But, the general process includes four standard steps :
- Gather documents
- Determine your business structure’s tax form
- Learn deadlines, filing methods, extensions, and payment options
- Consult an expert
1. Gather documents
How to file business taxes besides depends on the information you have, not just your business structure. Before you begin the process, gather the necessity documents to help you fill out your business tax filing form ( s ) :
- Taxpayer identification number (TIN)
- Financial records
The reports are easy to find if you ’ re using accounting software to organize your bookkeeping throughout the year. Using another method ( e.g., spreadsheets ) or an accountant ? Find or request the documents you need .
Remember to update your books throughout the year to prevent end-of-the-year scramble .
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Taxpayer identification number
You must identify your occupation on your tax return. Include your business ’ sulfur nine-digit taxpayer recognition number when filing returns. There are respective types of TINs, including Social Security numbers and Employer Identification Numbers ( EINs ) .
If you have employees or structured your clientele as a corporation or partnership, you must have an EIN. You can apply for an EIN through the IRS ’ s web site .
Did you lose your tax identification number ? First, look through old documents that might contain your TIN, such as a by tax come back or statement. If you silent can ’ metric ton find your TIN, contact the IRS .
Before filing your refund, you need arrant fiscal records, such as fiscal statements and supporting documents ( for example, receipts ) .
The fiscal statements accurately report your business ’ second income and expenses on your tax return. Some of the records you should gather include income statements, balance sheets, and supporting documents, such as receipts .
Income statement : Shows the business ’ randomness gross and expenses throughout the year. Use your income affirmation to complete the income section of your caller tax rejoinder. And, claim write-offs, such as the business loanword interest tax deduction, by using the expenses assign of the income statement .
Balance sheet : Shows assets, liabilities, and fairness. Report your annual income from business operations using the balance sail.
Supporting documents: Any documents that support the information in your early fiscal records. In event of an audited account, supporting documents back up the claims on your tax returns .
2. Determine your business structure’s tax form
Got your paperwork fix to go ? Great ! now, you need to know which form to file. Remember that individuals use shape 1040, U.S. Individual Income Tax Return, to file their personal taxes. But, what forms should your company use ?
Each type of structure uses a different form to report profits and losses :
- Sole proprietorships: The sole proprietor tax return is Schedule C, Profit or Loss From Business. Attach Schedule C to your personal income tax return.
- Partnerships: The partnership tax return is Form 1065, U.S. Return of Partnership Income. IRS Form 1065 is an information return that must be filed by the partnership and all members of the partnership with their Form 1040. The partnership also distributes Schedule K-1, Partner’s Share of Income, Deductions, Credits, etc., to all partners. Partners use Schedule K-1 to complete parts of their individual returns.
- Corporations: Most corporations (e.g., C Corp tax return) use Form 1120, U.S. Corporation Income Tax Return, to file their company tax returns. However, the S Corp tax return uses Form 1120-S, U.S. Income Tax Return for an S Corporation.
- Limited liability companies (LLCs): An LLC’s tax return depends on how the business is taxed. When setting up an LLC, owners choose if they want the LLC to be taxed as a corporation. If taxed as a corporation, LLCs must use Form 1120. Otherwise, single-member LLCs file Schedule C, and multi-member LLCs file Form 1065.
3. Learn deadlines, filing methods, extensions, and payment arrangements
After you complete the tax forms, you must file the forms with the IRS. Like with the type of shape you file, your tax filing due date depends on your clientele structure .
Some years, the deadline falls on a weekend or holiday. If the tax return key deadline falls on a weekend or vacation, your deadline is the follow business day .
- Partnerships and multi-member LLCs must file Form 1065 with the IRS and distribute Schedule K-1 to partners
- S Corps must file Form 1120-S
- Sole proprietors and single-member LLCs submitting Schedule C
- Corporations that end their year on December 31 must submit Form 1120
If you own a pot with a tax year that ends on a date other than December 31, your due date is the 15th day of the fourth month after the end of your tax year. however, if your fiscal tax year ends on June 30, you must file imprint 1120 by the 15th day of the third month after the end of your tax year ( i.e., September 15 ) .
You can file your small business tax reelect by mail or through the IRS ’ s e-File system. Depending on your business, you might be required to e-File. And, you can make tax payments through the IRS ’ s Electronic Federal Tax Payment System ( EFTPS ) .
Consider filing a business tax reference if you need to push back your tax return key deadline .
If you file form 1065, you may besides request a six-month propagation on Schedule K. however, the six-month elongation does not change the date you must distribute tax human body K-1 to all applicable individuals ( i, March 15 ) .
If you are ineffective to pay your taxes, contact the IRS to make requital arrangements .
4. Consult an expert
still uncertain of how to file your business taxes ? You ’ ra not alone. Consider hiring an accountant or early tax professional to help you prepare and file your tax returns. master advisors can help you accurately file, subtract write-offs, and claim deductions.
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This article has been updated from its original publication date of November 29, 2016 .
This is not intended as legal advice ; for more information, please pawl hera.