Small businesses calculate their business profit or loss for income taxes, then include this information on their personal tax returns. This guide will help you determine which forms to use and how to compile information for these forms.

Getting the Tax ID

As soon as you are prepared with establishing your business legally, you have to file for the tax ID number as well. This number works like a social security number, but for your business instead of for you. Every time you file a tax return, pay federal tax, and issue payroll, the tax ID number is always required. 

Due Dates

Because small businesses file their business tax returns with their personal returns, the due date is the same as the personal income tax return due date: April 15. If the due date falls on a holiday or weekend, the next business day is the due date for that year.

Do I Need a Tax Preparer?

A very simple small business with no cost of goods sold or assets to be depreciated might be able to use a tax software program, but most small businesses need a tax preparer.

Partnership income taxes can be very complicated, and even a simple Schedule C might be more difficult than you think.

Tax Details Needed to Complete Schedule C

The information you need to complete Schedule C includes:

• If you have an inventory of products or parts, you’ll need information to calculate cost of goods sold.
• Information to prove all business tax deductions, including information on the costs of business travel, driving expenses, and business meals (entertainment expenses are no longer deductible as a business expense).
• Information on costs for buying business assets like vehicles and equipment, to calculate depreciation deductions.
• If you work from home, include any information on the business use of your home, for a home business space deduction.

Self-Employment Taxes

Small business owners must pay self-employment taxes (Social Security/Medicare taxes). A tax software program or tax preparer can calculate this tax for you, or you can run the calculation yourself using Schedule SE.

The Qualified Joint Venture: A Special Filing Case

If you and your spouse are joint owners of a partnership, you may be able to file a qualified joint venture. It means filing two Schedule C forms, for your respective shares of the business. It’s complicated, so check with your tax professional to make sure you and your business qualify.