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There is no one-size-fits-all guide to doing taxes for your business. This is because businesses vary in a variety of ways including size and ownership. The payroll and tax experts at Future Systems have created a simple guide to outline the ways business structure affects your tax process.
Types of Businesses:
The forms you need to fill out and deadlines you are subject to are affected by the structure of your business. For example, a sole proprietorship will fill out different forms than a corporation.
Here are the tax forms each structure currently must fill out:
You can view deadlines for your business structure on the IRS website.
Business structure also affects whether you are taxed personally for business income or as a separate entity. For instance, in a sole proprietorship, an owner is taxed for business income through pass-through taxation. A corporation, on the other hand, is taxed as a business entity then shareholders receive dividends. This allows corporations to keep some money in their business. The downside is that the money shareholders receive is then taxed again as personal income.
Smaller companies assets, liabilities and income are considered to belong the the business owner(s). In a partnership, for example, you are not only liable for your own professional actions, but also for the actions of your partner(s). Corporations and S Corporations have the most liability protections of any structure, while LLCs have limited liability.
Now that you understand business structure and how it can affect your taxes and operations, you can find the necessary forms and tax deadlines to properly file your taxes. Simplify the process by letting the experts handle your payroll and tax filing for you. Contact Future Systems today!
- Your Team at Future Systems