They can be taxed like a sole proprietor (if they have only one member), partnership, or even like a corporation (C or S). LLCs have a lot of flexibility when it comes to filing taxes. Some business owners choose to organize under the popular LLC structure. If you are organized as a C Corporation or S Corporation, you should file a Form 1120 or Form 1120S, respectively. A Schedule K-1 is produced for each partner and then you use that K-1 to determine the income that is reported on your personal Form 1040. If you are organized as a Partnership, you file the strictly informational Form 1065. Partnership, S Corporation, and C Corporation It’s important to keep accurate records of your business income and expenses, as you will be required to report them on your taxes. If it’s farming income, you will use Schedule F. *If your small business income is from rents or royalties, you will use Schedule E. The profit or loss from the Schedule C is then transferred to page 1 of the Form 1040, where it is included with your taxable income. Note that if you have $5,000 or less in expenses you may be able to file the Schedule C-EZ instead. When tax time rolls around, if you are organized as a sole proprietor, you can use TurboTax Home & Business which will generate your Schedule C* to account for your business profit or loss. In most cases, new businesses operate as a sole proprietorship. You should also check with your state about getting a state tax ID.

Each entity type should apply to get a Employer Identification Number (EIN) from the IRS using Form SS-4. But for purposes of this article I will stick to the most popular: sole proprietor, partnership, corporation, and limited liability company.Ĭheck with your state and local authorities to see the requirements to form a business, as well as what type of license, permit, etc. There are many business structures available today. In general, the form you must use to file your business taxes is determined by the type of business you have organized. But since there’s no getting around them, here is some basic information about the forms you’ll need to file as a new business owner. As a new business owner, taxes are probably the last thing on your mind. Congratulations on starting your new business.

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