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Small business taxes can be confusing. The following information is intended to provide resources and guidance related to your business and tax concerns.
If you have any legal questions about your specific situation, our network of attorneys is here to help. Ask a tax lawyer any legal question or connect with one of our partners for accounting and bookkeeping support. This worksheet will be a handy reference for your conversation.
Here is the information that you provided:
Business Name:
Business Location: and
Industry:
Years in Operation:
Business Income:
Previous Taxes:
Business Ownership:
Business activity
Employees
• I am being audited by the IRS
• Fill out - IRS Form 2848 if you need representation - This is the IRS power of attorney form which provides written authorization for a representative to either attend an audit with you or attend the audit in your place.
you may require files annual tax returns.FILING A TAX RETURN FOR YOUR BUSINESS
You will need to report any income (total profit minus expenses) from your small business to the IRS. How you report this income depends on which corporate structure you use for your business.
a sole proprietorship.
You can request an automatic extension on filing your taxes using Form 7004. You will be required to provide an estimate of your tax liability.
• Business meals - If you have the adequate documentation, you may deduct up to 50% of the cost of business meals. Be sure that you have the receipt.
• Your spouse, children, or parents are employees
MORE RESOURCES
Rocket Lawyer can help your business avoid tax headaches.
• Incorporation - Explore tax advantages with an LLC, a corporation, or non-profit status.
• Annual Reports - Complete your required financial reports on time.
• Dissolution - Close your business legally and lower the risk of penalties..
SPECIAL OFFERS FROM OUR PARTNERS
We've teamed up with great companies to help you get the best of what you need.
• 1-800Accountant - Full-service small business tax preparation
• Bench - Professional and affordable bookkeeping
To learn more about these special deals, get in touch with our team in the Tax Legal Help Center.
FAQs about Small Business Taxes
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Do I have to file taxes for my small business?
Most likely, yes. If you are self-employed and you earned more than $400 in net income, then you are required to file a tax return. This is true for anyone who is fully or partially self-employed, regardless of whether you received a 1099 form for your work. In some cases, you still have to file even if you made less than $400. A tax professional can provide guidance specific to your situation.
The payment amount and schedule will depend on how your business is legally structured (e.g. LLC, S- or C-Corporation, LLP, etc.) and how much net income the business earned. If you have not consistently filed tax returns for an existing business or if you have received an IRS notice, it may be wise to talk to a lawyer .
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Do I have to pay taxes quarterly?
If you expect to owe more than $1,000 in self-employment taxes, then you'll need to make estimated tax payments quarterly. Even if you don't expect to meet the threshold for quarterly payments, you most likely still need to file a tax return.
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How much can a small business make before paying taxes?
There is no specific formula used for calculating how much a small business can make before paying taxes. The legal structure of the business and other factors such as allowable business expenses and special deductions will all be considered when determining the tax payment amount. A few examples of business expense deductions can include office supplies, business meals, or work-related travel expenses.
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How do small businesses file taxes?
The method of filing will differ based on the legal structure of your business. For instance, LLCs most often report their business income using Form 1040 while S-Corporations might use Form 1120S. You can file your taxes independently or work with an accountant or CPA who will prepare them on your behalf. Check out the Rocket Lawyer Tax Legal Help Center to find special offers on small business tax preparation and bookkeeping services from our partners.
