Simplify Tax Season: Your Ultimate Guide to Small Business Tax Compliance

As a small business owner, your time is precious. Don’t let tax season stress eat into your productivity. This comprehensive guide will empower you to tackle tax season with confidence, avoiding costly penalties and time-consuming return prep. Get ahead of the game for the 2024 tax season with our expert roadmap to every essential form, filing, and deadline. Read on to master the federal income tax forms you need to file in 2024 and breeze through tax season like a pro!

Tax Essentials: Key Forms for Business Owners to Know

2024 Tax Compliance: Federal Income Tax Forms for Individuals and Business Owners

As a small business owner, navigating tax season can be overwhelming. But, understanding the federal income tax forms you need to file is crucial for compliance. Let’s break it down:

Who Needs to File Individual Income Tax Returns?

• Sole proprietors and single-member LLC owners (freelancers, independent contractors, and gig workers)
• Individual taxpayers (employees, investors, trustees, and all other income earners)

Why File Individual Income Tax Returns?

• Report business income (sole proprietors and single-member LLC owners)
• Report income from various sources (employees, investors, trustees, and others)

Key Federal Income Tax Forms to Know:

• Form 1040: Personal income tax return
• Schedule C: Business income and expenses (for sole proprietors and single-member LLCs)
• Schedule E: Supplemental income and loss (for investors and trustees)

Remember: As a business owner, you wear multiple hats. Don’t let tax season stress you out. Stay on top of your tax game by understanding the federal income tax forms you need to file. Consult with a tax professional or accountant if you need guidance.

Individual Tax Forms: A Guide to What You Need to Know

As a individual taxpayer, you may receive income from multiple sources. To report your taxable income accurately, it’s essential to compile your records and tax forms. Let’s break down the common federal income tax forms you should expect to receive:

Federal Tax Return Forms

• Form 1040: U.S. Individual Income Tax Return (report your federal taxable income and tax liability)
• Form 1040-ES: Estimated Tax for Individuals (make estimated tax payments if you earn non-employee compensation)
• Form 4868: Application for Automatic Extension of Time to File U.S. Individual Income Tax Return (extend your tax return due date by 6 months)

Tax Forms for Independent Contractors

• Schedule C (Form 1040): Profit or Loss from Business (Sole Proprietorship) (report your business income)
• Schedule SE (Form 1040): Self-Employment Tax (calculate your self-employment tax liability)
• IRS Forms 1099: Non-employee compensation payments (receive from clients and payment facilitators)
  • Form 1099-NEC: Nonemployee Compensation
  • Form 1099-MISC: Miscellaneous Information
  • Form 1099-K: Payment Card and Third Party Network Transactions
• Form W-9: Request for Taxpayer Identification Number and Certification (provide to payers for non-employee compensation)

Employee Tax Forms

• Form W-2: Wage and Tax Statement (reports employee wages earned and tax withheld)
• Form W-4: Employee’s Withholding Certificate (helps employers calculate correct employee income tax withholding)

Remember, individual income tax professionals can guide you through the process and help identify the necessary documents for your tax return preparation.

Reporting Investment Income: A Guide to Tax Forms

If you earn income from investments like stocks, real estate, or interest-bearing accounts, you’ll need to report it on your tax return. Get familiar with the following tax forms to make tax season a breeze!

IRS Forms 1099 for Investment Income

• Form 1099-B: Proceeds from Broker and Barter Exchange Transactions (report sales of securities, commodities, and other investments)
• Form 1099-DIV: Dividends and Distributions (report dividend income from stocks and other investments)
• Form 1099-INT: Interest Income (report interest earned from bank accounts, bonds, and other investments)
• Form 1099-S: Proceeds from Real Estate Transactions (report real estate sales and exchanges)

Pass-Through Income Forms

• Schedule K-1: Report your share of business income from partnerships, S corps, estates, or trusts
  • Partnerships: Form 1065 Schedule K-1
  • S corporations: Form 1120-S Schedule K-1
  • Estates and Trusts: Form 1041 Schedule K-1
• Schedule K-3: Report international tax items from partnerships or S corps with foreign activity
  • Partnerships: Form 1065 Schedule K-3
  • S corporations: Form 1120-S Schedule K-3

Remember, accurate reporting is key! Make sure to review these forms carefully and consult with a tax professional if you need guidance.

Business Entity Tax Returns

Your business tax return form depends on your entity type. Here’s a breakdown of common business structures and tax forms for each entity:

C Corporations

• File Form 1120, U.S. Corporation Income Tax Return
• Report taxable income, balance sheet details, and answer ownership questions
• Make quarterly estimated tax payments if tax liability is at least $500
• Refer to IRS Publication 542, Corporations for estimated tax worksheet and instructions
• File Form 3921 for corporate stock transfers (e.g., stock options to directors)

Sole Proprietorships and Single-Member LLCs

• File Form 1040, Schedule C, Profit or Loss from Business (Sole Proprietorship)
• Report business activity on Form 1040
• Review Individuals and Business Owners section for individual income tax forms

Pass-Through Entities

• Includes S corporations, partnerships, estates, and trusts
• Multi-member LLCs default to partnership treatment for tax purposes
• File business tax returns but do not pay federal income tax on business income (exceptions apply)
• Distribute income and deductions to shareholders, partners, or beneficiaries
• Issue Schedule K-1s to each member
• Report ownership and share of income, deductions, debt, and tax credits
• Members report pass-through income and pay tax on individual tax returns
• S corporations and partnerships with international activity or foreign members should issue K-3 schedules

S Corporations

• File Form 1120-S, U.S. Income Tax Return for an S Corporation
• Report:
  • Business income
  • Balance sheet details
  • Ownership questions
• Quarterly Estimated Tax Payments:
  • Required if tax liability is at least $500 on:
    • Built-in gains
    • Excess passive income
    • Investment credit recapture

Partnerships

• File Form 1065, U.S. Return of Partnership Income
• Applies to:
  • Partnerships
  • Multi-member LLCs
  • Single-member LLCs with a partnership tax election
• Report:
  • Business income
  • Balance sheet details
  • Ownership questions

Estates and Trusts

• File Form 1041, U.S. Income Tax Return for Estates and Trusts
  • Report business income and answer ownership questions
• Estimated Tax Payments:
  • File Form 1041-ES, Estimated Income Tax for Estates and Trusts
  • Most estates and trusts expecting a tax liability of at least $1,000 in 2024 must make quarterly estimated tax payments
  • Use Form 1041-ES to calculate and pay quarterly estimates

Business Tax Extensions

• File Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns
  • Request a 6-month deadline extension for:
    • Corporation returns
    • Partnership returns
    • Trust returns
    • Estate returns
  • Pay estimated tax liability before the original due date
• Sole Proprietors and Single-Member LLC Owners:
  • File Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return
  • Request a 6-month deadline extension

Mark Your Calendars: Individual and Small Business Tax Due Dates in 2024

To avoid missing important deadlines, we recommend partnering with tax advisory professionals. Here are the key individual tax deadlines to know:

Individual Tax Deadlines

• General Rule: If a deadline falls on a holiday or weekend, it shifts to the next business day.

Form 1040 and Related Schedules

• Standard Due Date: April 15th
• Extension Request: File Form 4868 by April 15th

Estimated Tax Payments (Form 1040-ES)

• Quarterly Due Dates:
  • First quarter: April 15th
  • Second quarter: June 15th
  • Third quarter: September 15th
  • Fourth quarter: January 15th (next year)

Extended Form 1040

• Due Date: October 15th

Individual Income Tax Due Dates in 2024

• January 16th, 2024: Fourth quarter 2023 estimated tax payments due
• January 29th, 2024: IRS begins accepting and processing 2023 income tax returns
• February 15th, 2024: Deadline for employees to file Form W-4 to claim exemption from federal income tax withholding
• April 1st, 2024: Last day to take required minimum distribution from retirement accounts (for retirees who turned 73 in 2023)
• April 15th, 2024:
  • Deadline for individual income tax returns or extension requests
  • First quarter 2024 estimated tax payments due
  • Last day to make 2023 IRA and HSA contributions
• June 17th, 2024: Second quarter 2024 estimated tax payments due
• September 16th, 2024: Third quarter 2024 estimated tax payments due
• October 15th, 2024: Extended deadline for individual income tax returns
• December 31st, 2024: Last day to take required minimum distribution from retirement accounts (for retirees who turned 73 in 2024)
• January 15th, 2025: Fourth quarter 2024 estimated tax payments due

Business Tax Deadlines: Partnerships, S Corporations, C Corporations, Estates, and Trusts

General Rule

• If a deadline falls on a holiday or weekend, the due date shifts to the next business day.
• Fiscal year taxpayers (having a year-end other than December 31st) should consult tax professionals to determine their tax deadlines.

Tax Forms and Payments Due Dates

• Forms W-2 and 1099: January 31st
• Forms 1065 and 1120-S:
  • Standard due date: March 15th
  • Extension request (Form 7004): March 15th
• Form 3921: April 1st
• Forms 1120 and 1041:
  • Standard due date: April 15th
  • Extension request (Form 7004): April 15th
• Estimated Tax Payments:
  • Corporations, estates, and trusts: 15th day of the 4th, 6th, 9th, and 12th months of the tax year
  • First quarter estimate: April 15th
  • Second quarter estimate: June 15th
  • Third quarter estimate: September 15th
  • Fourth quarter estimate: December 15th
• Extended Deadlines:
  • Forms 1065 and 1120-S: September 15th
  • Forms 1120 and 1041: October 15th

Business Tax Due Dates in 2024

• January 16th, 2024:
  • Fourth quarter 2023 estimated tax payments due
• January 29th, 2024:
  • IRS begins accepting and processing 2023 income tax returns
• January 31st, 2024:
  • Deadline for employers to submit W-2s to the IRS and copies to each employee
  • Deadline for businesses to submit 1099 forms for non-employee compensation
• March 15th, 2024:
  • Deadline for partnership and S corporation tax returns or extension requests
• April 1st, 2024:
  • Deadline to file Form 3921 (for corporations offering stock options to employees)
• April 15th, 2024:
  • Deadline for C corporation, estate, and trust tax returns or extension requests
  • First quarter 2024 estimated tax payments due
• June 17th, 2024:
  • Second quarter 2024 estimated tax payments due
• September 16th, 2024:
  • Extended deadline for partnership and S corporation tax returns
  • Third quarter 2024 estimated tax payments due
• October 15th, 2024:
  • Extended deadline for C corporation, estate, and trust tax returns
• January 15th, 2025:
  • Fourth quarter estimated tax payments due

Late Filing and Underpayment Penalties for Businesses

The IRS imposes penalties for failing to file returns or pay sufficient tax. Multiple penalties may apply depending on the situation.

Common Infractions and Associated Fines

• Failure to Pay Tax Due:
  • Penalty: 0.5% of tax liability per month outstanding (max 25% of unpaid liability)
• Failure to Timely File with Tax Due:
  • Penalty: 5.0% of tax liability per month outstanding (max 25% of unpaid liability)
  • If also owing failure to pay penalty: 4.5% per month
  • Minimum penalty after five months: $485 or 100% of tax due (whichever is less)
• Failure to Timely File with No Tax Due:
  • No penalty, but file within three years to avoid losing refund
• Underpayment of Estimated Tax:
  • Use IRS Form 2210 (individuals) or Form 2220 (C corporations) to calculate penalty
• Failure to Timely File Information Returns (e.g., 1099 forms):
  • Penalty schedule:
    • First 30 days: $60 per form
    • 31 days late through August 1st: $120 per form
    • After August 1st: $310 per form
    • Intentionally failing to file: $630 per form

Interest on Overdue Tax Balances

• Varies by year and taxpayer type

Consult a Tax Professional

If you have overdue tax returns, consider scheduling a free consultation with a Better Ledger Inc. to simplify the process and minimize late filing penalties.

How to File Your Taxes?

E-Filing Your Tax Return

• Prepare and file your tax return online
• Most software allows document uploading and payment processing
• Varying levels of taxpayer assistance available

Paper Mailing Your Tax Forms

• Save software costs by filing via traditional mail
• Suitable for simple returns with no payment due
• Use certified mail receipts and parcel tracking for delivery confirmation

Partner with Tax Professionals at Better Ledger Inc.

For personalized tax assistance, consult with professional CPAs at Better Ledger Inc. Our team offers a range of tax advisory and preparation services to suit your needs.

Advantages of Partnering with Better Ledger Inc.

• Personalized, done-for-you tax services
• Maximized tax deductions and credits for better tax savings
• Return accuracy and technical expertise from licensed professionals
• Specific answers to your tax questions
• Year-round guidance and due date tracking
• Transparent, budget-friendly pricing

Disadvantages of Partnering with Better Ledger Inc.

• Larger financial investment than paper filing

Our team is dedicated to providing high-quality tax services for all entity types, including small businesses and sole proprietors. By partnering with us, you’ll receive personalized attention and expert guidance to ensure your tax needs are met.

Say Goodbye to Tax Season Stress with Better Ledger Inc.

Better Ledger Inc. offers comprehensive tax services for small businesses, providing year-round support and guidance to minimize tax burden and maximize savings.

Small Business Taxes

• Professional CPAs offer timely responses to questions and help minimize tax burden
• Various services include payroll tax advisory, sales tax support, and more
• Find business tax savings and reduce errors with expert guidance

Tax Advisory

• Tax and financial planning, entity restructuring, and ongoing tax compliance
• Reduce tax burden and avoid errors with expert advice

Audit Defense

• CPAs and EAs communicate with the IRS, develop a response strategy, and minimize assessments
• Let Better Ledger Inc. manage your IRS audit and reduce stress

Quarterly Estimated Tax Payments

• Professional CPAs monitor due dates and tax rule changes
• Comply with tax laws and avoid underpayment penalties

Personal Income Taxes

• Maximize deductions and minimize tax burden with expert assistance
• Income tax experts answer questions and file returns year-round

Schedule a Free Tax Savings Consultation

• Save money on professional accounting services and stay compliant with deadlines
• Learn how Better Ledger Inc. can support your business

By partnering with Better Ledger Inc., small business owners can enjoy peace of mind knowing that their tax needs are being met by experienced professionals. Schedule a free consultation today and discover how to minimize your tax burden and maximize your savings!