How to Find the Right Tax Forms for Your Small Business
Not all small businesses are created equal — the IRS makes sure of that. Which tax forms you must fill out depends on what type of small business you're in and how many employees it has. Federal tax forms can be confusing, but before you even get that far, you need to know which confusing tax forms to fill out.
Give serious consideration to hiring an accountant or CPA to help out with your company’s finances.
This table summarizes the kinds of taxes you may have to pay and the forms you’ll need to use to pay them.
Taxes to Pay and Forms to File
| Form of Your Business and Taxes to Pay |
Forms to File |
| Sole Proprietor |
|
| Income tax |
Form 1040 and Schedule C or C-EZ |
| Self-employment tax |
1040 and Schedule SE |
| Estimated tax |
1040-ES |
| Employment taxes |
Form 941 (943 for farm employees) |
| Federal unemployment tax (FUTA) |
Form 940 or 940-EZ |
| Depositing employment taxes |
Form 8109 |
| Partnership |
|
| Annual return of income |
Form 1065 |
| Employment taxes |
Form 941 (943 for farm employees) |
| Partner in a partnership (individual) |
|
| Income tax |
Form 1040 and Schedule E |
| Self-employment tax |
Form 1040 and Schedule SE |
| Estimated tax |
Form 1040-ES |
| Corporation or S corporation |
|
| Income tax |
Form 1120 or 1120-A (corporation), Form 1120S (S
corporation) |
| Estimated tax |
Form 1120-W (corporation only) and Form 8109 |
| Employment taxes |
Form 941 |
| S corporation shareholder |
|
| Income tax |
Form 1040 and Schedule E |
| Estimated tax |
Form 1040-ES |
Where do LLCs fit into the tax picture? Limited liability companies (LLCs) are created under state law. For federal tax purposes, LLCs default to general partnerships, and the rules and taxes for partnerships apply. However, you can elect to file as a C corporation, an S corporation, or a sole proprietorship. Remember that each state has its own rules for limited liability companies — be sure to check out your state’s unique tax rules before filing your state income taxes.
Accounting Glossary
accounting equation
The equation Assets = Liabilities + Equity, which demonstrates the two-sided nature of accounting and is useful for explaining the concept of double-entry accounting (or double-entry bookkeeping).
Accounting Glossary
accounting period
The time period for which financial information is being tracked in a business, such as monthly, quarterly, or annually.
Accounting Glossary
accounts receivable
An account that records the amounts that customers owe to a business.
Accounting Glossary
adjusting entry
A correction made to a bookkeeping account that adjusts for accounting errors or other necessary changes at the end of the accounting period.
Accounting Glossary
cash flows
Used to describe the source or sources of cash or how cash is used.
Accounting Glossary
Chart of Accounts
A list of all the accounts used by a business, including what types of transactions go into each account.
Accounting Glossary
debit
An accounting entry that increases an asset or expense account, and decreases a liability or income account.
Accounting Glossary
dividends
A portion of a company’s profits paid by share of common stock on a quarterly or annual basis.
Accounting Glossary
FASB
Financial Accounting Standards Board. FASB is the highest-ranking authority in the private (non-government) sector of the U.S. for making pronouncements on GAAP and for keeping accounting standards up-to-date.
Accounting Glossary
Federal Unemployment Tax
In the U.S., the fund that used to be known simply as Unemployment. Employers contribute to the fund, and states also collect taxes to fill their unemployment fund reserves. (The acronym FUTA means Federal Unemployment Tax Act.)
Accounting Glossary
fidelity bonds
A type of insurance — typically carried by employers for their employees — that helps guard against theft and reduce the risk of loss.
Accounting Glossary
FIFO
First-in, first-out. A method for costs of goods sold in which a business charges out product costs to cost of goods sold expense in the chronological order in which the goods were acquired.
Accounting Glossary
fungible
Describes a product that is interchangeable and virtually indistinguishable from another product.
Accounting Glossary
General Ledger
A summary of all of a business’s accounts and transactions.
Accounting Glossary
IASB
International Accounting Standards Board. The IASB (based in London) is the main authoritative accounting standards setter outside the U.S.
Accounting Glossary
Journals
The location in which bookkeepers keep records (in chronological order) of daily company transactions.
Accounting Glossary
LIFO
Last-in, first-out. A method for costs of goods sold that selects the last item you purchased first, and then works backward until you have the total cost for the total number of units sold during the period.
Accounting Glossary
LLP
Limited liability partnership. A legal structure that state laws offer to qualified professionals in which all the partners have limited liability.
Accounting Glossary
PC
Professional corporation. A legal structure that state laws offer to qualified professionals who otherwise would have to operate as an unlimited partnership liability.
Accounting Glossary
petty cash
A cash account that businesses keep on hand for unexpected expenses.
Accounting Glossary
revenue
Monies that are collected in the process of selling a company’s goods and services.
Accounting Glossary
salvage value
The amount that an asset is worth after it has been fully depreciated.
Accounting Glossary
statement of cash flows
A financial statement that summarizes a business’s cash inflows and outflows during an accounting period.
Accounting Glossary
transactions
Economic exchanges between a business or other entity and the parties with which the entity interacts and makes deals.
Accounting Glossary
worker’s compensation insurance
A type of insurance carried by employers that covers its employees in case they are injured on the job.
