TAS Tax Tip: Small Business Filing and Recordkeeping Requirements

There are about 57 million small businesses and self-employed taxpayers in the United States, including:

• Corporations and partnerships with assets less than $10 million
• Sole proprietors
• Independent contractors
• Members of a partnership that carries on a trade or business
• Others in business for themselves, even if the business is part-time
• Gig workers (i.e., Uber/Lyft drivers, owners of Airbnb rentals, delivery services, etc.)

The Taxpayer Advocate Service is sharing the following information with small business taxpayers to:

• Help you meet their filing requirements
• Share resources for information and tax return preparation
• Help you file accurate returns

Small Business Filing Requirements

Generally, the federal tax forms you will need to file vary depending on the type of business:

Business Entity	Type of Tax	Tax Forms
Sole Proprietor	Income Tax	Form 1040/1040SR Schedule C or F
	Self-Employment Tax	Form 1040/1040SR Schedule SE
	Estimated Tax	Form 1040-ES
	Employment Taxes	Forms 940 and 941, 944 or 943
Partnership	Annual return of Income	Form 1065
	Employment Taxes	Forms 940 and 941, 944 or 943
Partner in Partnership (Individual)	Income Tax	Form 1040/1040SR Schedule E
	Employment Taxes	Form 1040/1040SR Schedule SE
	Estimated Tax	Form 1040-ES
Corporation (C or S)	Income Tax – C Corporation	Form 1120
	Income Tax – S Corporation	Form 1120-S
	Estimated Tax	Form 1120-W (C-Corp Only)
	Employment Taxes	Forms 940 and 941, 944 or 943
S Corporation Shareholder	Income Tax	Form 1040/1040SR Schedule E
	Estimated Tax	Form 1040-ES

Recordkeeping

As a small business, you may have many different types of returns that are due, and many different types of deductions. As a busy small business owner, it’s important to put a user-friendly recordkeeping system in place.

You may need to substantiate income and deductions. Good records can assist you in preparing financial records, keeping track of property and deductions and so much more. Good records can also assist you in knowing exactly where to target funding and reducing expenditures to optimize profit. Your recordkeeping should keep track of:

• Gross Receipts
• Inventory, including any merchandise withdrawn from sale for personal use
• Expenses

For more helpful information for small businesses, see Tax Tip: Small business tax highlights, which addresses key components of small business ownership including:

• The general types of business taxes;
• The importance of making estimated tax payments if required;
• Payment options; and
• Ten Federal Tax Tips to help small business owners:

1. Know your limitations and know when you need to ask a professional for help
2. Keep adequate records
3. Separate your personal and business finances
4. Correctly classify your business
5. Manage payroll
6. Subscribe to e-News for Small Businesses
7. Research small business tax deductions
8. Self-employment tax deduction
9. Make your tax payments timely
10. For faster processing, file your returns electronically

TAS resources

• Small Business
• Get Help: Self-Employment Taxes
• Get Help: Consequences of Not Filing
• Low Income Taxpayer Clinics
• Taxpayer Roadmap https://taxpayeradvocate.irs.gov/roadmap
  • Publication 5341,The Taxpayer Roadmap
  • Publication 5341 (SP), The Taxpayer Roadmap (Spanish)

IRS resources

• Small Business and Self-Employed Tax Center
• Self-Employed Individuals Tax Center
• Small Business Forms and Publications
• Small Business Tax Workshop
• IRS Videos for Businesses
• Publication 334, Tax Guide for Small Business
• Publication 583, Starting a Business and Keeping Records
• Publication 4591, Small Business Federal Tax Responsibilities
• Publication 4689, Your Rights as a Small Business Owner (under the Small Business Regulatory Enforcement Fairness Act (SBREFA)
• Publication 535, Business Expenses
• Publication 463, Travel, Gift and Car Expenses
• Employment Taxes and the Trust Fund Recovery Penalty (TFRP)
• Publication 505, Tax Withholding and Estimated Tax
  • Notice 931, Deposit Requirements for Employment Taxes
• Publication 3151, The ABCs of Federal Tax Deposits
• Publication 542, Corporations
• Publication 225, Farmer’s Tax Guide
• General Instructions for Forms W-2 and W-3
• Gig economy:
  • Publication 5369, Gig Economy and Your Taxes: Things to Know
  • Gig economy tips taxpayers should remember
  • Your Taxes in the Sharing Economy
  • Understanding the Gig Economy 
• Choosing a tax preparer
  • IRS gov: Need someone to prepare your tax return?
  • IRS gov: Directory of Federal Tax Return Preparers with Credentials and Select Qualifications