Q: I’m a small business owner, and I’m not sure which tax forms I should be using. Can you help?
If you’re a small business owner, especially if you’re new in business, you may be wondering which tax forms to file this year. For a small business that’s not a corporation, there are three major types to consider along with their corresponding tax forms:
If your business type is not registered with the state, then a sole proprietorship is the default. This means that the sole proprietorship pays income taxes through the owner’s personal return. In this case, Schedule C (Profit or Loss for a Small Business) is used.
If your business type is a partnership, then it must consist of several partners and be registered with the state. In this case, an information tax return on Form 1065 is filed. As for individual partners, each one receives a Schedule K-1 reflecting their share of the partnership’s losses and profits.
The last business type for small business owners is a Limited Liability Company (LLC). If the LLC is made up of only one person, it’s a single-member LLC and pays income taxes as a sole proprietorship. If it’s composed of several members, it’s a multiple-member LLC which is taxed as a partnership.
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To Your Success,
The Corporate Sis.