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Accounting & Bookkeeping

Important Tax Forms That Businesses Should Know Before Tax Time Rolls Around

Written by Analytix Editorial Team | February 6, 2023

Tax time can quickly become a period full of paperwork, document review, and stressing about deadlines. This can be true even for a CPA firm if multiple clients require last-minute assistance with their tax filing.

If you are a business owner planning to file your taxes or even if you choose CPA assistance, we’ve got a checklist of essential forms you can keep handy. This list will help ensure that you meet your tax obligations without missing out on any payments that are likely to attract penalties. Keeping the relevant documents ready can also help your CPA file on time in case you choose to obtain filing assistance. Tax filing requires information about the following:

  • Business structure details
  • Details for income the business earns
  • Financial statements
  • Tax deductions and other payment details
  • Business records, including the number of staff members, payroll, and more

CPA firms may also need to review personal accounting and financial statements. This is especially true for startups and small businesses to identify and rule out any duplicate data. Business owners and operators may also need personal details to rule out any errors made in tax payments.

Important Tax Forms for Business Owners to Understand

Important tax Forms

Small business tax forms differ from those for medium and large organizations.

Schedule C:

Schedule C is used to report the profit or loss of a business over the course of a financial year. You will need to add the total amount of earned income or mention the loss that occurred during the year.

Schedule C must be attached to Form 1040 when filing the personal return.

To file this form accurately, you require a balance sheet, profit and loss statement, inventory information, and a list of expenditures.

Schedule C is used by:

  • Sole proprietor
  • Single-member limited liability company (LLC)

Due Date:

  • April 15

Schedule SE:

Schedule SE is used for reporting Social Security and Medicare taxes. This form is filled out in addition to Schedule C to report self-employment tax.

Schedule SE is required for sole proprietors and single-member LLCs.

Due Date:

  • April 15

Schedule K-1

Schedule K-1 is used to report partnership income returns. Also, Form 1065 is used to report the partnership’s total net income or losses.

Note:

The IRS won’t accept personal tax return Form 1040 if not filed with Schedule K-1.

  • Make sure all partners know about the need to file a Schedule K-1.
  • Partners are responsible for reporting business income and losses in a personal income tax return.
  • Schedule K-1 should be filed with Form 1065.

Schedule K-1 is used by:

  • Partnerships
  • C corporations
  • Single-member LLCs

Due Date:

  • April 15

Form 1120

Form 1120 (U.S. Corporation Income Tax Return) is used to report income, gains, losses, deductions, and credits of businesses registered as corporations.

Due Date:

  • April 15

Note:

Corporations exempt under section 501 don’t have to file tax Form 1120.

Form 1120-S:

S-Corporations (S-Corp) use Form 1120-S (U.S. Income Tax Return form) to report profit and losses and pay federal taxes.

Due Date:

  • March 15

Estimated Taxes Forms

Form 1040-ES

Self-employed individuals use Form 1040-ES (estimated tax) to pay taxes to the IRS. If you are self-employed, you must pay taxes to the IRS on time.

Due Date:

  • April 15

Note:

You can pay estimated taxes in four equal installments during the year. You can opt for this by notifying the IRS. The first installment is due when they file the personal return.

Form 1120-W

Form 1120-W is for corporations to report estimated taxes.

Due Dates:

  • April 15, June 15, September 15, and December 15

Note:

  • This form must be filed when a corporation has an annual tax liability of $500 or more.

Deduction Forms:

Form 8829:

For businesses using home space for business purposes, this form helps cover certain home expenses.

These forms have been widely used because of COVID-19.

Note:

  • Form 8829 must be filed with a personal tax return.
  • This form should be used to deduct business taxes.
  • If you used 15% of your home for business purposes, you could only show 15% of your home expense for a business tax deduction.
  • To calculate the expenses, divide the total square footage of your house by the square footage used for your business.

1099 Payment Forms:

If your business hired freelancers during the tax year, you need to use 1099 payment forms as follows:

Form W-9:

Form W-9 is used to request that the freelancer or taxpayer provide the employer with personal information so that an identification number can be assigned to report taxes to the IRS. You should give this form to all the freelancers you hire so they can show proof of their wages. Your business shouldn’t withhold payroll taxes of freelancer wages.

Note:

Your business must report all the wages paid to contractors during the tax year to the IRS using a 1099.

Forms 1099-NEC and 1099-MISC:

Form 1099-NEC is only filed to report non-employee compensation for hiring freelancers.

Form 1099-MISC is filed to report miscellaneous expenses such as rents, royalties, prizes, or awards paid to third parties.

Both 1099-NEC and 1099-MISC have sub-copies A, B, C, 1, and 2. These sub-copies should be sent to different authorities.

  • Send Copy A to the IRS
  • Share Copy 1 with the state tax department
  • Give Copy 2 and Copy B to the contractor or vendor
  • Keep Copy C for the employer’s records

Note

If your business is filing Form 1099-MISC or Form 1099-NEC, they must attach Form 1099 with it. Form 1099 includes a summary of Form 1099-MISC and/or Form 1099-NEC.

Summary

It’s hard to keep track of these forms when trying to focus on other aspects of your business. Some businesses fail to submit tax forms on time and must pay fines and other penalties. It’s a common issue for all small organizations when it comes to filing forms on due dates.

Do You Want a Better Solution for Taxes?

You can leave tax planning to experts to stay compliant with obligations. Choose to outsource tax filing services to submit all the above forms and other payroll forms on time.

Many companies choose to outsource accounting roles to increase productivity and grow their business. One of the primary advantages of outsourcing relates to the fact that businesses get expertise on-demand without compromising work quality. Outsourcing accounting and bookkeeping services allows you to receive an extra hand to increase business workflow and expand the accounting team without worrying about infrastructure and other hiring formalities.

Next Steps

Written by

Analytix Editorial Team
Analytix Editorial Team

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