How to File Tax Forms as a First-Time Business Owner

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How to File Tax Forms as a First-Time Business
Owner
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• If youre new to the world of entrepreneurship,
  taxes are one of the things you need to learn
  about, fast. Not to worry, help is at hand.
  Heres our handy guide to the forms youll need,
  both for yourself and your employees.

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Income Reporting for Yourself

• The form you use to file an annual income tax
  return depends on your type of business entity.
  For example
• Form 1040 for sole proprietors
• Form 1120 or 1120-S for corporations
• Form 1065 or 1065-B for multiple member LLCs and
  partnerships

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Tax Payments for Yourself

• Most small businesses pay estimated quarterly
  taxes throughout the year. One of these forms
  should accompany each payment
• Form 1040-ES for individuals including sole
  proprietors, partners and S-Corporation
  shareholders
• Child care and education costs
• Form 1120-W for corporations

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• In addition, you must pay self-employment tax,
  which covers your social security and Medicare
  taxes. This tax is included on Form 1040.

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Income Reporting for Employees

• Anyone you pay to do work for your business must
  have their earnings reported to the IRS. Send in
  one of these forms for each individual
• W-2 for employees
• 1099 for independent contractors

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Tax Payments for Employees

• You must deduct some taxes from your employees
  paychecks, and then pay those taxes to the
  government. They include social security,
  Medicare, federal income tax withholding and
  federal unemployment tax.

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• The accompanying form will be one of the
  94-series, depending on your specific business,
  such as Form 940, 941, 943, 944 or 945.
• You dont have to make any tax payments for
  independent contractors.

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Excise Tax

• Certain types of business such as
  manufacturers or sellers of heavy equipment, or
  who conduct a wagering business must also
  report excise tax.

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• Form 720 for environmental, communications, air
  transportation and fuel taxes
• Form 2290 for trucks, tractors and buses used on
  public highways
• Form 11-C for wagering activity (use Form 730 to
  figure the amount)

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Expenses

• Theres a whole array of deductions you can take
  as a business owner in order to decrease your tax
  burden. Be sure to keep expense records and
  receipts so you dont miss out. Report on Form
  1040, 1120 or 1120-S
• Costs of raw materials and labor

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• Capital expenses (purchase of equipment and
  other start-up costs)
• Interest on business mortgages, loans and credit
  cards
• Personal expenses such as a home office and
  business travel

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• As a new business owner, all this info may seem
  overwhelmingly complicated. To be sure you get it
  right the first time, consider using a
  professional tax service or CPA (Certified Public
  Accountant) who is knowledgeable about the tax
  requirements governing small businesses.

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• At Xendoo, working with small businesses is our
  specialty. We understand your concerns and needs,
  from getting your books ready to finding
  opportunities to reduce your taxes. Best of all,
  we understand you cant afford to pay an arm and
  a leg for accounting expertise. Check out our
  affordable rates today.