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What Tax Form Does My Business Need to File?

By Nick Zarzycki on November 21, 2018

On top of your personal tax return (Form 1040), every business owner must submit additional tax forms relating to their business’ finances. But figuring out which of these forms you need to submit can be tricky.

Read on to learn which forms your business entity needs to file, and which forms everyone needs to file.

Sole proprietors

“Sole proprietorship” isn’t a legally recognized entity—it’s just a fancy term for one person who owns a business and is on the hook for any company debts.

If you work alone and never incorporated your business, you’re probably a sole proprietor.

If you own a sole proprietorship, you’ll have to file the following forms:

  • Schedule C. Instead of filing a separate return, sole proprietors report their business earnings through this extra form attached to their personal taxes. The IRS provides detailed instructions for filling out a Schedule C here.

  • If you had business expenses totalling less than $5,000 this year, you might be qualified to use a simplified version of the form called Schedule C-EZ instead (check Part I of C-EZ to see if you qualify).

Once you’ve completed either form, subtract your total expenses from your earnings to get your net profit or loss, and include this number in your personal tax return (Form 1040).

Note: If your business made money from the rental of real estate or royalties, you might also have to fill out a Schedule E (IRS instructions here).

Partnerships

Partnerships are like sole proprietorships, except two or more people contribute to them.

If you and at least one other person contribute money, property, labor or skill to a business and expect some kind of return, have received an Employer ID Number from the IRS, and have never incorporated, you’re probably a partnership.

All partnerships need to file the following forms:

  • Form 1065, the U.S. Return of Partnership Income. See our guide to Form 1065 for more information.

  • In addition to Form 1065, each individual member of the partnership must also file a Schedule K-1, which shows each member’s share of the profit/loss for that tax year. This number is then reported on each partner’s personal tax return—again, no need for a separate return.

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Limited liability corporations (or LLCs)

An LLC is a type of business that lets you avoid personal liability for your company’s debts.

If you’ve filed articles of organization and an LLC Operating Agreement with your state, you’re probably an LLC.

A single-member LLC is an LLC with one member. If you run a single-member LLC and don’t elect to be treated as a corporation, you’ll file your taxes as a sole proprietor. (Refer to the “sole proprietorships” section for a list of forms you’re required to submit when filing your taxes as a partnership).

A multiple member LLC is an LLC with more than one member. Multiple member LLCs can elect to file their taxes as a partnership or as a C corporation. (Refer to the “partnerships” or “C corporation” sections for a list of forms each entity is required to submit).

C corporations

A C corporation is a company that is taxed separately from its owners (or “shareholders”). If your company has filed Form SS-4 to obtain an employer identification number (EIN), has a board of directors, and holds regular shareholder meetings, it’s probably a C corp.

C corporations must file the following:

  • Form 1120, which is like a much more complicated version of Schedule C of Form 1040. Although you should certainly scan the IRS’s instructions for filling it out, the form is so detailed that most small business owners usually get a professional to help out.

For a full rundown of the U.S. Corporation Income Tax Return, check out our guide to Form 1120.

S corporations

An S corporation is a C corporation or LLC that has decided to pass its profits and losses to its shareholders, which they then report on their personal tax returns. An S corp enjoys all of the benefits of incorporation, but isn’t taxed separately from its shareholders.

If your company is based in the U.S., has fewer than 100 shareholders, and has successfully submitted Form 2553 to the IRS, it’s an S corporation.

S corporations must file the following:

  • Form 1120S, which you can look over the instructions for here. Like Form 1120, however, 1120S is so detailed that most small business owners usually get a professional to fill it out for them.

  • Each individual shareholder must also file a Schedule K-1 to report their individual profit or loss.

For a simple overview, read our guide to navigating Form 1120S.

If you’re still not sure what kind of entity you are…

Check out the U.S. Small Business Administration’s guide to common business structures for a more detailed definition of each entity type.

Any business that hires employees

If your company has employees, you might need to file the following:

  • A Form W-2 for each employee, to report any wages, tips, and other compensation you paid them during the tax year.

  • If you withheld taxes from an employee’s paycheck, you might also need to file Form 940 and Form 941.

Any business that pays contractors

If your small business paid $600 or more to a contractor or professional (i.e. someone who worked for you or provided you with a service but is not an employee), you’ll also need to file Form 1099 as part of your taxes.

For small business owners and freelancers, the most important type of 1099 is Form 1099-MISC. See our guide to Form 1099 and 1099-MISC for more information

If you earned income from tax dividends, prize winnings, or the sale of of personal property, you might have to file other types of Form 1099.

1099 forms need to be ordered from the IRS, so make sure you request them well in advance of the January 31 deadline.

Any business that deducts depreciation or amortization

If you plan to make any Section 179 deductions on your return this year, or plan on deducting any other kind of depreciation or amortization, you’ll also have to fill out Form 4562.

How do I file these forms?

If your total income is below $66,000 you can use the IRS Free File software to file your taxes. If your income is higher than $66,000, you can still take advantage of the IRS free fillable forms.

If you’re going analog and filing a hard copy of your tax return with the IRS, find the address for your state. Make sure it’s postmarked on or before the deadline.

For more help filing your taxes, check out our complete guide to Filing Your Small Business Tax Return.

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This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.

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