Every business requires a different tax form, where you report your business’s earnings and expenses. Regardless of the form you are using, you generally calculate your taxable business earnings in the same way. TurboTax has two products to serve business owners—TurboTax Home & Business is designed for sole proprietors and 1099 contractors, while Turbotax For Business helps you prepare taxes for corporations, partnerships and LLCs.
Step 1—Collect your records
Combine all business records. Before filling out any tax form to report your professional income, you should have all the records before registering earnings and expenses in your business. If you use a computer program or spreadsheet to organize and track all transactions throughout the year by calculating your earnings and deductions rather than trying to keep in mind every sales and expense over the year.
Step 2—Find the right form
Determine the correct IRS tax form. You have to pay your business earning information to the IRS and pay taxes on them, but choosing the right form to report income is dependent on how you work your business. Many small business owners use the sole proprietorship, which allows them to report all their business earnings and expenses on a Schedule C coupon of their personal income tax return. If you run the business as an LLC and you are the sole owner, the IRS also allows you to use the Schedule C attachment.
Step 3—Fill out your form
Fill your Schedule C or Form 1120. If you are reporting your professional earnings report on Schedule C, you can find a copy of the IRS website or input your all financial information and use the turbotex to form a form for you. Schedule C is an easy way to show business taxes because it is only two pages long and lists all the expenses that you can claim on it. When done, you reduce your business earnings costs to get a net profit or loss. After that, transfer this number to your personal income tax form and include all other personal income tax matters.
However, if you use Form 1120, you can calculate your taxable business income in the same way, but the form requires more details which may not always be applicable for a small business.
Step 4—Pay attention to deadlines
Learn the duration of various filing. When you use a Schedule C, it forms part of your Form 1040 and therefore, no separate file deadline is applicable. It normally applies to the April 15 deadline If you are taxed as a C-Corp, then you will have to file Form 1120, by the end of the tax year by the 15th day of the next month, for which most taxpayers will have April 15. If you have taxed as S-Corp, then you will have to apply for Form 1120 S. You will have to register it till the 15th day of the third month at the end of the tax year, which is March 15 for most taxpayers. All you need to do is answer simple, plain-English questions.
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