The information in this article is up to date for tax year 2023 (returns filed in 2024).
As a small business owner, navigating tax season can be overwhelming and confusing. In fact, a survey by American University found that there is a significant “tax literacy gap” among U.S. business owners.
An alarming 37% of the small businesses and the gig workers struggle with feelings of anxiety and confusion about how to file taxes–including 25% of respondents who did not know how to file their taxes at all.
If this feels relatable, you’re not alone. That’s why we’ve put together this beginner’s guide to filing small business taxes.
You’ll learn what types of taxes you may be liable for, what small business tax forms to use, and key tax deadlines so you can remain compliant and take advantage of eligible tax savings.
Types of Small Business Taxes
There are several types of small business taxes you may be required to pay. Which taxes you are liable for will primarily depend on what kind of business you own and what state you operate in. Here’s a quick breakdown.
Income tax
All businesses except for partnerships are required to pay income tax. Federal income tax is a pay-as-you-go system. For employees, this typically means a portion of each paycheck is withheld to go towards this income tax. If you don’t have tax withholding (e.g., you’re self-employed), you may be required to pay quarterly estimated taxes on your income.
Pro Tip: Most states require corporate or business income taxes, but each state has different rules. Be sure to look into your own state and local tax laws to ensure you meet your tax obligations.
State taxes can generally be classified into three categories:
- Initial formation fees.
- Taxes on business income.
- Sales and use tax.
The IRS website has a list of links to state government pages with info on individual state tax requirements for businesses.
Estimated tax
Income tax must be paid as it is earned over the year—either through tax withholding or through estimated payments. As a business owner, you will likely need to pay estimated taxes on your self-employment income, unless you are a corporation or S corporation.
Estimated taxes are paid quarterly and are estimated based on your expected adjusted gross income (AGI)—most people use the prior tax year’s income to determine their estimated payments for the following year.
Quarterly estimated tax payments for 2024 are due:
- April 15
- June 17
- September 16
- January 15, 2025
Be sure to keep up on your estimated payments as late payments or underpayments can result in a costly penalty.
Read more: 4 Tips for Making Your Quarterly Tax Payments Less Painful
Employment tax
If your small business has employees, you will be obligated to pay certain employment taxes.
Employment taxes include the following:
- Social security and Medicare taxes
- Federal income tax withholding
- Federal unemployment (FUTA) tax
At the end of the year, you will fill out and file Form W-2 to report employee wages and other compensation in your business. Use Form W-3, Transmittal of Wage and Tax Statements to transmit Forms W-2 to the Social Security Administration.
You must also share a copy of the W-2 by January 31 with your employee(s) for their own tax filing records.
Self-employment tax
If you work for yourself, you’ll be responsible for paying self-employment taxes. Self-employment taxes (also known as FICA taxes) cover both the business and employee payroll tax obligations for Social Security and Medicare taxes for a total of 15.3% of your gross wages or income.
Pro Tip: Use the self-employment tax deduction to deduct the employer-equivalent portion of your self-employment tax when calculating your AGI.
Excise tax
Excise taxes are taxes levied on specific goods, activities, or services. Businesses that are required to pay excise taxes can include importers, manufacturers, and retailers. Federal excise taxes are usually collected on fuel-related purchases, airline tickets, tobacco sales, and other goods and services.
Visit IRS.org for more information on your excise tax liability.
Small Business Tax Forms
Below is a list of common tax forms you may need to use when filing taxes for your small business.
Small Business Income Tax Forms
- Form 1040, U.S. Individual Income Tax Return
- Schedule C (Form 1040), Profit or Loss From Business
- Schedule E (Form 1040), Supplemental Income and Loss (partnerships)
- 1120, U.S. Corporation Income Tax Return (C corporations)
- 1120-S, U.S. Income Tax Return for an S Corporation
- Schedule K-1 (Form 1120-S) (S corporations)
Self-Employment Tax Form
Estimated Tax Form
Employment Tax Forms
- 941, Employer’s QUARTERLY Federal Tax Return
- 943, Employer’s Annual Federal Tax Return for Agricultural Employees
- 944, Employer’s ANNUAL Federal Tax Return
FICA Tax Forms
- W-2, Wage and Tax Statement (shared with employee)
- W-3, Transmittal of Wage and Tax Statements (sent to the Social Security Administration)
Federal Unemployment (FUTA) Tax Forms
Small Business Tax Deadlines
Meeting tax deadlines is important for ensuring your small business meets its tax obligations and you aren’t liable for any penalties.
Here are the main tax deadlines you need to be aware of when filing taxes for your small business:
January 15
- Pay quarterly estimated tax (4th payment for prior year)
- File Schedule SE
January 31
- Submit information on Social Security and Medicare taxes and income tax withholding
- Share Form W-2 with your employee(s)
- Share Form W-2 and W-3 to the Social Security Administration
- File information returns for payments to nonemployees and transactions with other persons
- Share Form 1099 to the recipient
- Pay Federal Unemployment taxes (FUTA)
- Submit Form 940
February 28
- File information returns for payments to nonemployees and transactions with other persons
- Submit Form 1099 to IRS
March 31
- Deadline to file information returns for payments to nonemployees and transactions with other persons if filing electronically
April 15
- File income taxes
- File Forms 1040, or 1040-SR, and Schedule C
- Pay first quarterly payment for the year
April 30
- Pay Federal Unemployment taxes (FUTA)
- Submit Form 940
June 15
- Pay 2nd quarterly estimated tax
July 31
- Pay Federal Unemployment taxes (FUTA)
- Submit Form 940
September 15
- Pay 3rd quarterly estimated tax
October 31
- Pay Federal Unemployment taxes (FUTA)
- Submit Form 940
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The articles and content published on this blog are provided for informational purposes only. The information presented is not intended to be, and should not be taken as, legal, financial, or professional advice. Readers are advised to seek appropriate professional guidance and conduct their own due diligence before making any decisions based on the information provided.
