Business Taxes Forms and Filing Requirements Explained

Business taxes forms and filing requirements can be overwhelming, especially for new business owners. There are multiple forms to file, and each one has its own set of requirements.

The IRS requires businesses to file a Form 1040 if they have employees and pay employment taxes. This form is used to report business income and expenses.

Businesses with annual gross receipts of $26 million or less are required to file Form 1040. This includes sole proprietorships, partnerships, and corporations.

Related reading: File Form 941

As a small business owner, it's essential to know which forms you need to file and when they're due, whether you're a sole proprietor, corporation, partnership, or nonprofit.

You'll need to file the right forms to stay compliant and avoid unnecessary penalties.

Whether you're a sole proprietor, corporation, partnership, or nonprofit, your business structure is key to determining which forms you need to file.

A little help from a trusted resource like TaxAct can make a big difference in getting your business taxes done on time.

Knowing which forms to file will help your business stay compliant and avoid unnecessary penalties.

A unique perspective: Buy Sonotube Forms

As a business owner, it's essential to understand which tax and IRS forms are necessary when hiring employees. You'll need to provide tax notice to those you employ.

Employers must file Form 941, Employer's Quarterly Federal Tax Return, and Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. They must also send W-2s to workers and W-3s to the Social Security Administration.

To ensure compliance, business owners should be aware of the different forms required for employment taxes. This includes sending W-2s to workers and W-3s to the Social Security Administration.

Recommended read: What Is a Tax Return

Business owners must have a working knowledge of which tax and IRS forms are necessary when hiring employees.

As a business owner, you'll need to provide tax notice to those you employ, especially if you're not operating as a sole proprietorship.

Form W-2 is the Wage and Tax Statement that employers distribute to employees by January 31 of the following tax year.

This form has important information about full-time and part-time employees' compensation, income taxes, Social Security taxes, Medicare taxes, and non-taxable income.

Employers must collect a completed Form W-4 from full-time employees to ensure the appropriate payroll tax amounts.

Form W-4 is the Employee's Withholding Certificate, which states personal information, employment status, dependents, and tax adjustments.

If you work with independent contractors, you'll need to issue a 1099 to each person if you pay them more than $600 over the course of a single year.

The 1099 form is used to report miscellaneous income, and it comes in two variations: 1099-MISC and 1099-NEC.

Take a look at this: What Is 1099 Tax Form

If you're an employer or business owner, you'll want to know about the Admissions and Amusement Tax Forms.

You can file for a refund of admissions and amusement tax through the Philadelphia Tax Center, but only if you're eligible. To be eligible, you'll need to file the AA1 Admissions and Amusement Tax Refund Application.

Discover more: How to File Business Taxes in Texas

This refund application is the only form available to admissions and amusement tax filers who feel they've overpaid. You can also file for a refund of sales and use tax through the COT/SUT 205 Sales and Use Tax Refund Application.

There are specific forms for requesting refunds, including the AA1 and COT/SUT 205, and even a form for purchasing items for resale. You can find these forms in the Philadelphia Tax Center.

You can also request a refund by faxing in the COT/SUT 212 Purchases for Resale Refund form.

For another approach, see: What Is Sales Tax

If you've incorporated as a C corporation, you'll file Form 1120 for your corporation income tax return, which is a separate business tax return from your personal income tax return. This form asks more questions and requires balance sheet information for the beginning and end of the tax period.

C corps must pay tax on their earnings, and their shareholders also pay tax on dividends and other returns, a phenomenon known as double taxation.

Expand your knowledge: Filing Taxes No Income

The business structure you choose greatly impacts which tax forms you use. According to the National Federation of Independent Business, 47% of respondents structure their business as an S-Corp, 27% are limited liability companies (LLCs), and 17% use the C corporation entity.

Here are the five general types of business taxes grouped by the IRS:

If you've incorporated as a C corporation, you'll file Form 1120 for your corporation income tax return. This form is a bit more involved than a Schedule C, asking more questions and requiring balance sheet information for the beginning and end of the tax period.

C corps must pay tax on their earnings, if applicable, and their shareholders also pay tax on dividends and other returns. This is called double taxation because the same income is taxed twice.

To file Form 1120, you'll need to prove and state corporate income tax liability, as outlined in the steps of the form. This form is required when a business is set up legally as a domestic corporation, which often applies to larger businesses.

For another approach, see: Income Tax Deadlines

Here are some key points to keep in mind about C corporations:

A corporation is a complex business structure that requires careful consideration. Form 1120 is the U.S. Corporation Income Tax Return, which is required for domestic corporations.

Corporations can be structured like C corporations but have a limited number of shareholders, known as S corporations. S corporations are required to file Form 1120-S.

The choice of corporation type depends on your business needs. If you have a limited number of shareholders, an S corporation might be a good option.

S corporations are pass-through entities, meaning the shareholders report the income and loss on their personal tax returns. This can help avoid double taxation on corporate income.

Limited liability companies (LLCs) can also be treated as corporations, but they have more flexibility in their tax filing options. An LLC can file as a sole proprietorship, partnership, or S corporation.

Here are the general types of business taxes:

Corporations have various tax forms to file, including Form 500: Corporation Income Tax Return. However, S corporations, partnerships, and LLCs should not file a corporation income tax return.

If you run a nonprofit organization, you'll need to file Form 990 to report information like income, expenses, and balance sheet details. This form also requires you to provide information about your organization's officers and sources of funding.

Nonprofit organizations pay officers like you, and you'll receive a Form W-2 or similar form to report earnings on your individual income tax return.

Here's a list of forms you might need to file:

Nonprofit organizations, like many educational organizations, rely on Form 990 to report their financial information. This form helps ensure transparency and accountability within the organization.

If you're a C corporation, you'll need to file Form 1120 for your corporation income tax return. This form is a bit more involved than a Schedule C, asking more questions and requiring balance sheet information for the beginning and end of the tax period.

Form 1120 is a separate business tax return that doesn't get filed as part of your personal income tax return. Instead, the corporation reports any dividends or other tax information that applies to you on the applicable Form 1099 information return.

You'll need to pay tax on your earnings if you're a C corp, and your shareholders will also pay tax on dividends and other returns. This is known as double taxation, because the same income is taxed twice.

To help you navigate the process, here are some key forms related to corporation income tax returns:

Form 1065 is the U.S. Return of Partnership Income, used by businesses set up as legal partnerships.

Partnerships don't pay tax on their own, instead, they pass profits and losses to partners.

This form provides a holistic picture of the financial activities in a given year, and is important for maintaining transparency.

Form 1065 is specifically designed for partnerships, not other types of businesses.

A different take: Form 1065

If you're a business owner who's incorporated as a domestic corporation, you'll need to file Form 1120, the U.S. Corporation Income Tax Return. This form is required to prove and state corporate income tax liability.

Form 1120 is a bit more involved than a personal income tax return, as it asks for balance sheet information for the beginning and end of the tax period. This form is not filed as part of your personal income tax return, but as a separate business tax return.

You'll report any dividends or other tax information that applies to you on the applicable Form 1099 information return. If you're a C corporation, you'll file Form 1120 for your corporation income tax return.

If you've incorporated as a C corporation, you'll pay tax on your earnings, and your shareholders will also pay tax on dividends and other returns. This is called double taxation because the same income is taxed twice.

Curious to learn more? Check out: Personal and Business Taxes