TAS Tax Tip: Small Business Filing and Recordkeeping Requirements
February 24, 2023 -As a small business, you may have many different types of returns that are due, and many different types of deductions. As a busy small business owner, it’s important to put a user-friendly recordkeeping system in place.
Title: Small Business Filing and Recordkeeping Requirements
There are about 57 million small businesses and self-employed taxpayers in the United States, including:
Corporations and partnerships with assets less than $10 million
Sole proprietors
Independent contractors
Members of a partnership that carries on a trade or business
Others in business for themselves, even if the business is part-time
Gig workers (e., Uber/Lyft drivers, owners of Airbnb rentals, delivery services, etc.)
The Taxpayer Advocate Service is sharing the following information with small business taxpayers to:
Help them meet their filing requirements
Share resources for information and tax return preparation
Help them file accurate returns
Small Business Filing Requirements
Generally, the federal tax forms you will need to file vary depending on the type of business:
Business Entity
Type of Tax
Tax Forms
Sole Proprietor
Income Tax
Form 1040/1040SR Schedule C or F
Self-Employment Tax
Form 1040/1040SR Schedule SE
Estimated Tax
Form 1040-ES
Employment Taxes
Forms 940 and 941, 944 or 943
Partnership
Annual return of Income
Form 1065
Employment Taxes
Forms 940 and 941, 944 or 943
Partner in Partnership (Individual)
Income Tax
Form 1040/1040SR Schedule E
Employment Taxes
Form 1040/1040SR Schedule SE
Estimated Tax
Form 1040-ES
Corporation (C or S)
Income Tax – C Corporation
Form 1120
Income Tax – S Corporation
Form 1120-S
Estimated Tax
Form 1120-W (C-Corp Only)
Employment Taxes
Forms 940 and 941, 944 or 943
S Corporation Shareholder
Income Tax
Form 1040/1040SR Schedule E
Estimated Tax
Form 1040-ES
Recordkeeping
As a small business, you may have many different types of returns that are due, and many different types of deductions. As a busy small business owner, it’s important to put a user-friendly recordkeeping system in place.
You may need to substantiate income and deductions. Good records can assist you in preparing financial records, keeping track of property and deductions and so much more. Good records can also assist you in knowing exactly where to target funding and reducing expenditures to optimize profit. Your recordkeeping should keep track of:
Gross Receipts
Inventory, including any merchandise withdrawn from sale for personal use
Expenses
For more helpful information for small businesses, see Tax Tip: Small business tax highlights, which addresses key components of small business ownership including:
The general types of business taxes;
The importance of making estimated tax payments if required;
Payment options; and
Ten Federal Tax Tips to help small business owners:
Know your limitations and know when you need to ask a professional for help
Keep adequate records
Separate your personal and business finances
Correctly classify your business
Manage payroll
Subscribe to e-News for Small Businesses
Research small business tax deductions
Self-employment tax deduction
Make your tax payments timely
For faster processing, file your returns electronically
TAS resources
Small Business
Get Help: Self-Employment Taxes
Get Help: Consequences of Not Filing
Low Income Taxpayer Clinics
Taxpayer Roadmap https://taxpayeradvocate.irs.gov/roadmap
Publication 5341,The Taxpayer Roadmap
Publication 5341 (SP), The Taxpayer Roadmap (Spanish)
IRS resources
Small Business and Self-Employed Tax Center
Self-Employed Individuals Tax Center
Small Business Forms and Publications
Small Business Tax Workshop
IRS Videos for Businesses
Publication 334, Tax Guide for Small Business
Publication 583, Starting a Business and Keeping Records
Publication 4591, Small Business Federal Tax Responsibilities
Publication 4689, Your Rights as a Small Business Owner (under the Small Business Regulatory Enforcement Fairness Act (SBREFA)
Publication 535, Business Expenses
Publication 463, Travel, Gift and Car Expenses
Employment Taxes and the Trust Fund Recovery Penalty (TFRP)
Publication 505, Tax Withholding and Estimated Tax
Notice 931, Deposit Requirements for Employment Taxes
Publication 3151, The ABCs of Federal Tax Deposits
Publication 542, Corporations
Publication 225, Farmer’s Tax Guide
General Instructions for Forms W-2 and W-3
Gig economy:
Publication 5369, Gig Economy and Your Taxes: Things to Know
Gig economy tips taxpayers should remember
Your Taxes in the Sharing Economy
Choosing a tax preparer
gov: Need someone to prepare your tax return?
gov: Directory of Federal Tax Return Preparers with Credentials and Select Qualifications
Visit the Taxpayer Advocate Service’s Get Help center for a list of tax topics to assist you with resolving many tax related issues.
For more updates from the Taxpayer Advocate Service, visit the news and information center to read the latest tax tips, blogs, alerts and more.
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