Which Small Business Tax Return(s) Do I Need to File?

Which Small Business Tax Return(s) Do I Need to File?

by Greg Lindberg, January 2017

Small business ownership can be overwhelming. At times, you may have no idea which vendor to select for your manufacturing needs or which freelance writer to hire for a large-scale content marketing project.

The same can be said for choosing the appropriate business tax returns to file for your specific business entity. By exploring the most relevant federal business income tax returns, you can help determine which one(s) you must file with the IRS.

Form 1040: U.S. Individual Income Tax Return

If you work as an independent contractor, or you maintain a pass-through business structure like a sole proprietorship, partnership, S corporation, or LLC taxed as an S corp., you must use Form 1040 for your business tax purposes. While this is traditionally known as a personal income tax return, you are required to report any business income you earn that directly passes through to you as an individual.

  • If you have a sole proprietorship or a single-member LLC, you report your business income/losses on Schedule C of Form 1040.
  • If you receive income from a pass-through entity, such as an S corporation or an LLC taxed as a partnership, you will receive a Schedule K-1 reporting the profit/loss from the business, and this information must then be reported on your Form 1040.

Form 1040 must be submitted by April 15 or the next non-holiday business day. The only exception is if you file for a six-month extension.

Form 1065: U.S. Return of Partnership Income

General partnerships must submit IRS Form 1065 to report business-related income their companies earn. Keep in mind that this is considered an information return, and income taxes are generally not due with the return.

Because partnerships are arranged with a pass-through business structure, their owners must report their share of income on their Form 1040 returns. Each partner's share of the business income/loss is reported on a Schedule K-1. The K-1 must be given to each partner to be reported on the partner's personal return.

Starting in 2017, Form 1065 must be filed with the IRS by March 15 for general business partnerships that operate on a traditional calendar year.

Form 1120: U.S. Corporation Income Tax Return

To properly report any business income that is earned at the corporate level, owners of C corporations must file IRS Form 1120.

Starting in 2017, the new filing deadline for C corporations operating on a calendar year is April 15. So, you must file Form 1120 by this date to report all income your C corporation generated at the corporate level from the previous year.

Form 1120S: U.S. Income Tax Return for an S Corporation

Owners of S corporations will complete and file IRS Form 1120S. Remember that Form 1120S is classified as an information return designed to inform the IRS about how much income your business generates each year.

S corp. owners must report this business income on their personal Form 1040 returns as well, since an S corporation is a pass-through business entity, and all of this income passes directly through to the personal tax requirements of the owners involved.

Each partner's share of the business income/loss is reported on a Schedule K-1. The K-1 must be given to each partner to be reported on the partner's personal return.

For S corporations that are run on a standard calendar year, Form 1120S is due to the IRS by March 15.

Form 990: Return of Organization Exempt From Income Tax

If you operate a nonprofit organization, such as a 501(c)3, you probably know that nonprofits with tax-exempt status are exempt from paying income taxes to the IRS. However, these organizations are not exempt from completing and submitting business-related paperwork.

Tax-exempt nonprofits must file Form 990. This information return is intended to inform the IRS on the financial activities of a nonprofit entity. The main purpose of this IRS form is to ensure that nonprofit owners are properly handling contributions and monies they receive.

Certain nonprofits—with gross revenues of under $50,000 per year—may file Form 990-N or Form 990-EZ.

The federal filing deadline for nonprofit organizations running on a calendar year is May 15.

Form 1040-ES: Estimated Tax for Individuals

If you earn 1099 income as a sole proprietor, as part of a business partnership, or as the operator of an LLC or corporation, you're likely required to make estimated tax payments. IRS Form 1040-ES is used to file these quarterly payments.

The due dates for estimated tax payments fall on four deadlines throughout the year: January 15, April 15, June 15, and September 15. Each payment is based on an estimate of various taxes you owe on income you earned in the previous quarter. If you neglect to make estimated quarterly payments, you can face penalties when it's time to file.

Form 1099-MISC: Miscellaneous Income

Although it is not a return that must be filed, it's still worth noting the importance of IRS Form 1099-MISC. You should receive a copy of Form 1099-MISC from each client or company for which you perform work and earn at least $600 in a given year.

Keep in mind that 1099 income is separate from wages or salaries you receive from an employer from which taxes are withheld. Wages and salaries are listed on Form W-2.

You should receive all copies of Form 1099-MISC by January 31. You must then report the income listed on this form on your Form 1040 before filing it with the IRS prior to the April 15 deadline.

Once you've become familiar with the specific IRS forms that apply to you and your small business, you'll be better prepared to handle your tax and reporting obligations year-round, and not only in that mad dash from January to April.