Tax Man
Most new businesses are often confused about the business structure they choose to take on and its relation to taxes. Of course a knowledgeable CPA (like myself) can help you navigate through the various IRS filings, for the few brave do-it-yourself individuals I have just made your life a little easier. I’ve summarized in tabular form the types of forms needed from the IRS and included a quick link to the IRS in which further data can be found. And oh yes, you are very welcome!
Here are the specific Tax obligations per structure and the respective forms that you need to use.
| FORMS |
Partnership |
Corporation |
S Corporation |
|
| Income Tax Forms | ||||
| 1040: US Individual Income Tax Return | Yes | Yes
|
Yes
|
|
| Sched C (Form 1040): Profit or Loss from Business | Yes | |||
| Sched C-EZ (Form 1040): Net Profit from Business | Yes | |||
| Schedule E (Form 1040): Supplemental Income and Loss | Yes
|
|
||
| 1120: U.S. Corporation Income Tax Return | Yes | |||
| 1120S: U.S. Income Tax Return for an S Corporation | Yes | |||
| 1120 Sch. K-1 (Form 1120S) Shareholder’s Share of Income, Deductions, Credits, etc. | Yes | |||
| Annual Return of Income | ||||
| 1065: U.S. Return of Partnership Income | Yes | |||
| Self Employment Tax | ||||
| Sched SE (Form 1040): Self Employment Tax | Yes | Yes
|
||
| Estimated Tax | ||||
| 1040-ES: Estimated Tax for Individuals | Yes | Yes | Yes
|
|
| 1120-W: Estimated Tax for Corporations | Yes | Yes | ||
| Social Security and Medicare taxes and Income Tax Withholding | ||||
| 941: Employer’s Quarterly Federal Tax Return | Yes | Yes | Yes | Yes |
| 943: Employer’s Annual Federal Tax Return for Agricultural Employees | Yes | Yes | Yes | Yes |
| 944: Employer’s Annual Federal Tax Return | Yes | |||
| Providing information on social security and Medicare taxes and income tax withholding | ||||
| W-2: Wage and Tax Statement (for the employee) | Yes | |||
| W-3: Transmittal of Wage and Tax Statements (for the Social Security Administration) | Yes | |||
| Federal unemployment (FUTA) tax | ||||
| 940: Employer’s Annual Federal Unemployment (FUTA) Tax Return | Yes | Yes | Yes | Yes |
| Employment Taxes | ||||
| 8109-B: Federal Tax Deposit Coupon | Yes | |||
| Excise Taxes | ||||
| Form 720: Quarterly Federal Excise Tax Return | Yes | Yes | Yes | Yes |
INP– to be accomplished by the individual partner in the Partnership
INS – to be accomplished by the individual shareholder in the S Corporation
An LLC, since it is relatively new operates differently in terms of Tax requirements. The owners of an LLC are referred to as members. The members can be individuals, corporations or foreign units. An LLC can also be owned by a single member.
The tax requirements for an LLC can be filed as either a sole proprietorship, partnership or a corporation. To finalize the classification, the owner/s must file a Form 8832 and choose how they want to be classified. Their choice will dictate the type of tax forms they will use.
(Disclaimer: There are other various state forms not mentioned. The articles is meant for informational purposes only.)
1 IRS, Business Structure, May 2012, http://www.irs.gov/businesses/small/article/0,,id=98359,00.html
2 IRS, Sole Proprietorships, May 2012, http://www.irs.gov/businesses/small/article/0,,id=98202,00.html
3 IRS, Partnerships, May 2012, http://www.irs.gov/businesses/small/article/0,,id=98214,00.html
4 IRS, Corporation, May 2012, http://www.irs.gov/businesses/small/article/0,,id=98240,00.html
5 IRS, S Corporations, May 2012, http://www.irs.gov/businesses/small/article/0,,id=98263,00.html
If you enjoyed this article, please consider sharing it!
