Small Business Tax Forms
The Bookkeeper Mensch's Corner
Hello all! This edition will feature some important IRS forms that small business will come in contact with. These forms are the latest forms that are available as of November 2024 and are part of your tax return and the numbers come from what the bookkeeper puts together and adjustments to the bookkeepinjg made by the tax preparer.
As a business owner, you should be familiar with these forms, as the tax return is yours and not your bookkeeper’s or tax preparer’s YOU sign off on the tax return and are responsible for its accuracy.
This episode doesn’t have to do directly with tax returns, but so many business owners look at bank balances to determine what their net profit is and how much they might owe in taxes. No! Not the right way, and this episode explains it.
Click here to listen to this episode
Single Member LLC
Let’s start with single member LLC’s. The two page form that is included in your personal tax return is called a ‘Schedule C’. Simply, it’s a Profit and Loss form for your business.
A Sole Proprietorship (Solopreneur) or a Single Member LLC (Schedule C)
If you look at the expenses listed, this would be a good way to begin to set up your chart of accounts if you are a new business. This way, your bookkeeping expense categories will be very close to what ends up on the Schedule C as part of your tax return.
A Partnership (1065) Form
If you have a partnership, 2 or more people owning a business, OR 1 person owning the business and has one or more investor, this is the form that the accountant will use. Partnerships are more time consuming and difficult because of the K-1 forms. These go to investors based on the profit or loss of the business.
Partners/Investors K1 Form
These forms go to the partners/investors of an LLC or a corporation and must be included in the investors or partners personal tax return.
1099 NEC Form
As I’ve spoken about in the podcast, this form goes to subcontractors by Jan 31st every year. I’ve included a link to the form here if you are using paper forms. However, most people are now E-filing through accounting software or online E-filing services.
S Corporation 1120 Form
An 1120S form is for S Corporations, an 1120 is for C Corporations.
Let me know what what bookkeeping pain points you’re having, so I can write and share some tips to help in upcoming newsletter posts.
See you soon for our next Bookkeeper’s Corner!
Your bookkeeping mensch,
Paul