Which federal tax forms you need for your business can be very confusing, particularly for non-CPA businesses that file their own taxes. The tax rules themselves can change from year to year, but many of the forms that you are likely to need have remained relatively unchanged for several years.
Forms You Need to Know
Here's your cheat sheet. The business tax forms that you'll need will vary depending on the type and complexity of your company, as well as which state you operate in, but every SMB should know the following forms:
W2 and W3
The due dates for these two forms can vary year to year. Business owners must file Copy A of the W2 and W3 with the Social Security Administration. Copies B and C go to the employee, and you retain Copy D for your own records. If you've missed the deadline due to the changed filing date or for any other reason, you must complete and file them and distribute copies to your employees as soon as possible. One of the common problems with the forms is that ink isn't dark enough. Make sure you check your printer's ink level and replace the cartridge, if necessary, before you start printing tax forms.
Small business owners typically distribute the 1099-MISC form to contractors. It is essential that you correctly classify workers as employees (for whom you would pay Social Security, Medicare and unemployment taxes) or contractors (who are responsible for these taxes themselves). Misclassification of workers can subject your business to penalties. For further information on whether to classify a worker as a contractor or an employee, see the IRS classification rules.
If your business is a partnership, you'll need to file form 1065, which reports income, losses, deductions and gains. In a partnership, taxes aren't paid on income, but the income "passes through any profits and losses to partners," according to the IRS. Schedule C is for businesses operating as a sole proprietorship. Schedule C income is included on the business owner's personal return and is used to report profits or losses from a sole proprietorship. Forms 1120 and 1120S are the primary forms for corporations. The form 1120 is for a C corporation, while the form 1120S is for a sub chapter S corporation. According to the IRS, the 1120 forms are used to report income, gains, losses, credits and deductions, as well as determine income tax liability.
With the right resources, doing your company's taxes shouldn't be too daunting. For a full, state-specific list of the business tax forms you'll need, visit the IRS web page for small business forms and publications.
This information is only provided for general informational purposes, and should not be considered as offering individualized tax advice. Tax laws are complex; please consult your tax advisor on specific issues related to your tax situation.