TurboTax Tip: When you use a Schedule C with Form 1040, or file Form 1120 for a corporation, you usually need to file your return by the April 15 deadline. When you use TurboTax Home & Business (sole proprietors and contractors) or TurboTax Business (corporations, LLCs and partnerships), you just need to answer simple questions about your business income and expenses, and we’ll fill in all the right forms for you.
However, if you use a corporation or elect to treat your LLC as one, then you must always prepare a separate corporate tax return on Form 1120 (or Form 1120S if you are an S-Corp). 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. Many small business owners use a sole proprietorship which allows them to report all of their business income and expenses on a Schedule C attachment to their personal income tax return. You always need to report your business earnings to the IRS and pay tax on them, but choosing the right form to report earnings on depends on how you operate your business. Step 2-Find the right formĭetermine the correct IRS tax form. TurboTax works with programs like QuickBooks and Quicken, so you can import information directly into your tax return. If you use a computer program or a spreadsheet to organize and keep track of all transactions during the year, calculating your income and deductions is much easier than trying to remember every sale and expenditure that occurred during the year. Before filling out any tax form to report your business income, you should have all records in front of you that report your business earnings and expenses. TurboTax has two products to serve business owners- TurboTax Home & Business is designed for sole proprietors and 1099 contractors, while TurboTax Business helps you prepare taxes for corporations, partnerships and LLCs. Regardless of the form you use, you generally calculate your taxable business income in similar ways. When it’s time to file a federal income tax return for your small business, there are various ways you can do it, depending on whether you run the business as a sole proprietorship or use a legal entity such as an LLC or corporation.Įach type of entity requires a different tax form on which you report your business income and expenses. If you run your business as a corporation, or decide to treat your LLC as one, then you need to prepare a separate corporate tax return on Form 1120 (or Form 1120S if you are an S-Corp, or Form 1065 for a partnership and/or multi-member LLC).If you run your business as a sole proprietorship, or as an LLC and you are the sole owner, you can report your business income and expenses on Schedule C along with your personal income tax return.Before filling out any tax form to report your business income, gather all records-paper or electronic-that pertain to your business earnings and expenses.For information on the third coronavirus relief package, please visit our “ American Rescue Plan: What Does it Mean for You and a Third Stimulus Check” blog post.
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