How Do I Report My Taxes of My Business?

How and to whom you report (file) and pay your business taxes depends on the form of your business, what it does, and whether or not it has any employees and/or owns property.

Income Taxes

With the Federal tax ID number, sole proprietorships and single-member LLCs file and pay income taxes by means of a Schedule C attached to their Federal income tax return, Form 1040. Regular corporations file and pay their taxes by means of a corporate income tax return, Form 1120. Partnerships file an information return, Form 1065, and S corporations file an S Corporation Return, form 1120S, but the entities themselves do not pay income taxes. Instead, the partners or S corporation owners pay their share of the taxes as part of their personal income tax return.

Other Federal Taxes

If your business has employees, it must pay Social Security and Medicare (FICA) taxes and  Federal Unemployment (FUTA) taxes. It also must withhold Federal and State income taxes and FICA taxes from each employee’s paycheck, with a few exceptions.

Your business must make electronic deposits of withheld FICA and income taxes to the IRS either semi-weekly or monthly through the  Electronic Federal Tax Payment System (EFTPS). Other required forms include:

  • Form 940 – Employer’s Annual Federal Unemployment (FUTA) Tax Return,
  • Form 941 – Employer’s Quarterly Federal Tax Return, and
  • Form 945 – Annual Return of Withheld Federal Income Tax.

Your business pays its share of FICA taxes via Form 944, the Employer’s Annual Federal Tax Return. It also may need to pay excise taxes depending on whether or not it:

  • manufactures or sell certain products,
  • operates certain kinds of businesses,
  • uses various kinds of equipment, facilities, or products, or
  • receives payment for certain services.

State and Local Taxes

Some states, counties, and cities also require your business to pay:

  • income tax,
  • sales tax if it sells certain products and/or services,
  • property tax if it owns real estate.

You can apply for EIN online from the IRS, your state, and your county or city. Or, you can get them from a third-party provider like Gov Doc Filing.