Complete Guide on How to File Income Tax for your business

As a small business owner, staying in front of your tax obligations is essential to avoid penalties and ensure compliance with the law. Filing federal income taxes can seem daunting, but you can successfully navigate the process with some planning and organization.

Self-Employment Tax and Form SE must be filed if your annual self-employment or business income is $400 or more. It’s natural for you to question, “Is it possible to do company business taxes on my own?” The answer is yes. But knowing how it operates is essential so you don’t screw up the papers.

Many methods of tax preparation and filing exist, some of which are exclusive to specific industries. But how should one even start? Which paperwork do you have to fill out? To determine your financial obligation, what factors must be considered? Is there a dire consequence for failing to file corporate tax returns?

Don’t stress out just yet; submitting your tax return can be easy. That is a complete tax filing manual for companies.

What is the process for small business owners to file taxes for the first time?

There are various ways to file a federal income tax return for the business, depending on whether or not you operate as a sole proprietorship or use a general framework like an LLC or corporation. You may always employ an accountant to help you out. Still, just like any other part of your business, you also need to know what’s going on in the financial department

Suppose you have multiple entities in your firm. In that case, you may need to file various tax returns to disclose your income and expenses. Regardless of your filing type, the procedures for determining your taxable cash flow are essentially the same.

Also, you must account for freelancers and issue them IRS Form 1099s. To comply with IRS regulations, you must identify which workers qualify as independent contractors, learn to correctly complete and file Form 1099-NEC, and distribute these forms to the appropriate parties.

Basics Steps for Filing Tax

Be aware of when things need to be done

Several types of businesses have different tax filing due dates. For instance, companies were required to submit their returns by April, whereas single proprietors had until May. Payroll taxes must be deposited monthly or biweekly, and estimated taxes must be paid quarterly.

Get all relevant financial documents

Gather your tax paperwork and account statements before beginning your filing. That contains payroll records, income reports, depreciation estimates, bank and credit card statements, and significant purchase receipts. You’ll need the following data to file tax returns for your company. Before tackling your tax returns, a complete set of financial records relating to your business’s income and expenditures is necessary.

Utilize accounting software or a spreadsheet to organize and keep track of all transactions throughout the year rather than trying to piece together the data for each sale and expense. Calculating your revenue and deductions is much simpler.

Fill out the proper and relevant Tax Forms

Determine the tax form you need to file with the US Revenue Service. As a business owner, you must legally declare and pay income tax on all profits from your operations. Still, the manner you choose to do so will differ in relevance to the specifics of your firm.

Schedule C is an attachment many sole entrepreneurs use to detail their business’s income and expenses when filing their tax returns (Form 1040). If you’re the only member of an LLC you’re running, the IRS will treat you like a sole proprietorship and require you to file your taxes using Form C.

Suppose your business is incorporated, or you elect to treat your LLC as a corporation for tax purposes. In that case, you must file a supplemental business tax return utilizing Form 1120 for C-Corporations or the 1120S for S-Corporations. Because they are treated as partnerships, multi-member LLCs typically file Form 1065.

Fill out the Forms before the Deadline

You can derive your taxable income using your business’s income and expenses as data points. Having done so, you will have your taxable net income. In general, the following procedures can be followed when filing federal income taxes with the Federal Revenue Service (IRS):

Choose the proper tax form to submit based on how you organized your firm. Form 1040 and Schedule C are used by sole proprietors, while limited liability companies and corporations use Form 1120 and Form 1120-S.

Make sure to include business earnings and expenses on your tax return. Your total income will comprise your net income and any money you make from investments or rent.

Submit your completed tax return to the IRS in addition to the necessary payment. You can submit your return via mail, in person at an authorized tax preparation location, or electronically utilizing tax preparation software or the assistance of a tax professional.

Finally, it’s critical to maintain thorough records of all monetary dealings made during the year. Next year’s tax filing will go more smoothly, and you’ll have a better handle on your company’s financial situation overall.

The IRS stipulated deadlines by which you must complete these forms. On April 15th, returns that include a Schedule C with Form 1040 or Form 1120 for corporations must be submitted. For most S-Corps, the deadline for filing Form 1120S is March 15th, the third month after the end of the tax year. Make sure you save a copy of all your tasks after the procedure for posterity.

Disadvantages of not filing Tax Returns with the IRS

Falsely avoiding paying business taxes to the Internal Revenue Service is a bad idea. Charges, interest, and other repercussions may be imposed for late or missed business tax returns. Failing to file business tax returns with the IRS may result in the following outcomes.

Failure to file or pay taxes may result in penalties from the Internal Revenue Service. When a tax return is filed late, a fine of up to 25% of the tax bill is assessed for each full or partial month that the return is overdue.

From the tax return’s original due date until the tax is paid in full, interest is owed to the IRS. A rate equal to the brief federal rate plus three percent is set every three months.

You risk legal action from the IRS if you avoid paying your taxes. If you fail to pay your debts, liens on the property, asset seizures, and other legal action may be taken.

Not submitting your taxes increases your risk of inspection by the Internal Revenue Service, which can take time and money.

Failing to file your corporation taxes with the IRS can lead to financial penalties, interest charges, civil proceedings, and audits. Talk to a tax expert or the Internal Revenue Service (IRS) if you need guidance completing your tax return or have any questions regarding your tax responsibilities.


Filing federal income taxes for small businesses is an overwhelming undertaking. Yet, it is an essential component of successfully operating a business. Small business owners can guarantee that they are meeting their tax requirements and avoiding penalties for non-compliance by ensuring that they have followed the measures that have been given above.

The proprietors of small businesses are responsible for determining the amount of back taxes owed and making payments before the due date. April 15th is the cutoff date for the majority of small enterprises. Suppose a company anticipates having a tax liability of more than $1,000 at the end of the year. In that case, it may be required to make quarterly payments of anticipated taxes.

Suppose your small business is subject to an audit. In that case, you must retain all your documents and documentation for at least three years.

It may be necessary for owners of small businesses to seek the advice of a tax professional in certain circumstances to ensure that they comply with all of their tax requirements and make full use of all deductions and credits available to them.

After reviewing the requirements for an adequate income tax return, you need to make sure that your company is thriving and expanding so that you can submit an accurate tax return. If you work with Main Road Capital, you can access a group of financiers who provide unusually adaptive approval terms to small business owners. That will allow you to grow your company.

Seek assistance in identifying alternative financing options for your business. The professional staff here will be pleased to provide a hand. Do you wish to make the initial statement? Please send your application asap by filling out our online form. You can transform your dream of a successful business into a profitable reality with the assistance of Mainroad Capital Financials.

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