How to File Your 2017 Small Business Tax Return

By Ryan Smith on January 26, 2018

A lady files her tax return with an envelope

Heads up: this article is only relevant for U.S. businesses.

 

You can drown in the IRS website figuring out how to file your small business taxes. But no one ever grew a business by drowning, so we put together a simple, plain language guide to getting your small business taxes filed, no matter what business entity you are.

From start to finish, here’s the mission-critical info you need to get your 2017 taxes filed.

Get your records in order

Before you start anything, collect all your relevant business records. What’s relevant, you ask? Depending on your type of business entity, you’ll need different things, but start here:

  • Personal information (SSN, address, DOB, etc.)
  • Last year’s tax returns
  • Employer Identification Number (find yours on the IRS website)

You’ll also need to collect everything related to your earnings and expenses. On the earnings side, this could be:

  • Invoices you sent to clients
  • Records of any goods sold to customers
  • Sales records that note money coming into your business

On the expenses side, collect receipts for any costs you incurred during operation. Think of the following things:

  • Rent receipts for your small business
  • Office supplies
  • Employee salaries
  • Client lunches
  • Mileage records

Different small business entities will need to supply different information for their tax returns, so we created a checklist for each type here.

And if you want to avoid the dreaded task of sorting through shoe boxes full of crumpled business-related papers, Bench can help. Our small business bookkeeping tracks your earnings and expenses throughout the year, and keeps your records in our online app, so they’re always accessible.

Find the right form for your business entity

Now that you have your records sorted, it’s time to get your hands on the right tax form—and this depends on what kind of small business entity you operate.

Sole Proprietorship or LLCs with one member

Filing Deadline: April 17, 2018 (the same as your personal taxes)

If you own an unincorporated company by yourself or a Limited Liability Company with one member, file as a sole proprietor. You’ll report your business earnings and expenses through an extra form attached to your personal taxes—called a Schedule C—no need to file a separate return.

Schedule C is only two pages, and the IRS has fairly detailed line-by-line instructions to help you get it right. When you’ve finished, just subtract your total expenses from your earnings to get your net profit or loss. Include this number in your personal tax return.

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 here. Make sure it’s postmarked on or before the deadline.

Partnerships or LLCs with multiple members

Filing Deadline: March 15, 2018

Partnerships can take different forms, but for tax purposes, they all file small business taxes in the same way. Same goes for Limited Liability Companies with multiple members that elect to file taxes as a partnership. If your small business falls in this category, you need to file Form 1065, and then each individual member will get a Schedule K-1 showing his or her share of the profit/loss for the year. This is reported on each partner’s personal tax return. Again, no need to file a separate return.

The IRS has instructions to help you navigate Form 1065, but this form is complex and usually requires the help of a tax professional.

C corporations, S corporations or LLCs that elect to be corporations

Filing Deadline: April 17, 2018 (the same as your personal taxes)

If your small business is set up as a C corporation, or if you treat your LLC as one, you’ll need to prepare a separate tax return with Form 1120, in addition to your personal taxes.

Form 1120 is similar to the Schedule C form, but it is more complex, requires more detail and is separate and distinct from your personal tax return. The IRS has instructions for Form 1120, and it’s great to have a scan to understand the nuts and bolts, but most small business owners elect to hire a professional to complete these forms.

S corporations

Filing Deadline: March 15, 2018

If your small business is set up as an S corporation, you still need to file a separate corporate tax return, but you will use From 1120S. S-corp shareholders will need to report their share of profit or loss with a Schedule K-1 on their personal taxes, but the corporation still needs to file its own tax return. The IRS has instructions for Form 1120S to help you out, but again, most small business owners elect to use a professional.

Any small business that pays contractors

Filing Deadline: Sent to recipients by January 31, 2018

If your small business has paid $600 or more to a contractor or professional (i.e. someone who worked for you or provided you with a service but is an employee), you’ll also need to file Form 1099 as part of your taxes (this article will tell you everything you need to know about filing a 1099). These forms need to be ordered from the IRS, so you need to ensure that you request them well in advance of the January 31 deadline.

If you’re late, apply for an extension

Again, the deadline for filing your small business tax return will depend on your business entity, but if you’re finding yourself behind the eight ball, don’t fret—you can always apply for an extension. While this gives you some extra breathing room for getting your paperwork filed, it’s important to note that you still have to pay your estimated taxes by the original deadline.

While it can sometimes feel like a small business tax return is a very big undertaking, with a little preparation, it can be (mostly) painless. Collecting your records, finding the right forms, and keeping on top of deadlines will make for a headache-free 2018.

 

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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Written By

Ryan Smith

Ryan writes for Bench, the online bookkeeping service that does your bookkeeping for you.