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Updated for tax year 2024.
Starting a new business and keeping it going through its first year is an impressive accomplishment! When you file a federal income tax return for your business, the paperwork and forms the IRS requires you to use depends on your business entity and how your business is organized. Here’s how you’ll e-file your federal tax return, based on your business structure.
Sole proprietor
If you decided to keep it simple and structure your business as a sole proprietorship, you’re in luck. The paperwork and tax filing requirements are far easier for a sole proprietor than for any other type of business. Self-employed sole proprietors can include freelancers, independent contractors, and gig workers.
As a sole proprietor, you are the business. You can report all of your business income and business expenses on Schedule C, which you file with your personal income tax return (Form 1040). The business itself is not taxed separately, and all business tax deductions are taken on your individual tax return. You also don’t have to worry about the net worth of your Schedule C business from year to year because you and the business are the same.
If you have more than one business, report each business activity on a separate Schedule C. If you have a farm that you run as a sole proprietor, file Schedule F with your 1040 individual income tax return.
C corporation
If you’ve incorporated as a C corporation (C corp), you will file Form 1120 for your corporation income tax return. Form 1120 is a little more involved than a Schedule C. It asks more questions, and you must provide balance sheet information for the beginning and end of the tax period.
Form 1120 is not filed as part of your personal income tax return, but a separate business tax return. The corporation reports any dividends or other tax information that applies to you on the applicable Form 1099 information return.
C corps must pay tax on their earnings, if applicable. Their shareholders also pay tax on dividends and other returns. This is called double taxation because the same income is taxed twice.
Partnership
If your business is structured as a partnership, you will use Form 1065 to file your return. A partnership, unlike a corporation, does not pay tax. Instead, it passes net income, income tax credits, and other tax items through to each of the partners — those people who have a beneficial interest in the business.
Each partner receives a Schedule K-1 that reports their share of items to report on their tax return. When you receive a Schedule K-1 from your partnership return, you report partnership tax items on Schedule E, Part II, of your Form 1040 individual tax return.
S corporations (S corps) are structured like C corporations but have a limited number of shareholders. Like a corporation, an S corp sells shares but the income passes directly through to its shareholders.
S corp profits and losses are reported on Form 1120-S. The shareholders report the associated income and loss on their personal tax returns, using their individual income tax rates. This enables the S corp to avoid double taxation on its income.
Nonprofit organization
Nonprofit organizations — such as ministries, charities, and many educational organizations — file Form 990 to report information including income, expenses, and balance sheet information. If you run a nonprofit organization, you must also provide information about its officers and sources of funding.
If your nonprofit organization pays you — for example, if you are an employee of your nonprofit organization — you’ll receive a Form W-2 or another similar form so you can report earnings on your individual income tax return.
Limited liability company (LLC)
If your business is organized as a limited liability company and you own 100% of it, you can still file Schedule C with your individual income tax return, just as you would with a sole proprietorship. However, you have additional filing choices with a multi-member LLC. Depending on whether you want to be treated as a C corporation or an S corporation, you can choose to file Form 1120 or 1120-S, respectively. Alternatively, you can file as a partnership, using Form 1065.
What are the deadlines for filing my business taxes?
Due March 15:
- Form 1120-S (S corps, LLCs taxed as S corps)
- Form 1065 (partnerships, LLCs taxed as partnerships)
Due April 15:
- Form 1120 (C corps, LLCs taxed as C corps)
- Form 1040 Schedule C (sole proprietors)
If you filed for a business extension, the following due dates apply:
Due Sept. 15:
- Form 1120-S (S corps, LLCs taxed as S corps)
- Form 1065 (partnerships, LLCs taxed as partnerships)
Due April 15:
- Form 1120 (C corps, LLCs taxed as C corps)
- Form 1040 Schedule C (sole proprietors)
Note: If any of the above dates fall on a weekend or federal holiday, the payment deadline falls on the next business day instead.
The bottom line
Understanding your tax filing obligations as a small business owner and taxpayer can help your business stay compliant and avoid unnecessary penalties. Whether you’re a sole proprietor, corporation, partnership, or nonprofit, it’s essential to know which forms you need to file and when they’re due. With the right preparation and understanding of your business structure — and a little help from TaxAct® — you’ll have this year’s business taxes done in no time.