Essential Tax Forms for Small Business Owners
Running a small business can be incredibly rewarding, but it also comes with a fair share of responsibilities—especially regarding taxes. With so many forms to keep track of, it’s easy to feel overwhelmed. But don't worry, I've got you covered! Below, I’ve broken down the most commonly used state and federal tax forms that small business owners need to know about. This guide will help you easily stay on top of your tax obligations. Always double-check with your CPA to make sure you’ve gotten everything processed correctly.
Federal Tax Forms You’ll Use Regularly
Let’s start with the federal forms necessary for all U.S. businesses, regardless of location.
Form 1040 - U.S. Individual Income Tax Return
The bread and butter of tax forms. If you’re a sole proprietor, you’ll use Form 1040 to report your income and determine how much you owe in federal taxes. This is your main tax form, where all your income, deductions, and credits come together.
Form 1040-ES - Estimated Tax for Individuals
Running a business often means paying taxes quarterly. Form 1040-ES helps you calculate and pay these estimated taxes. Avoiding quarterly payments can lead to penalties, so keeping up with this is essential.
Form 941 - Employer’s Quarterly Federal Tax Return
If you have employees, you’ll use this form to report the taxes you’ve withheld from their wages, including Social Security and Medicare taxes. Keeping Uncle Sam happy by paying these taxes on time is crucial.
Form W-9 - Request for Taxpayer Identification Number and Certification
You’ll need this form to request a taxpayer identification number (TIN) from contractors and freelancers you hire. This form ensures you can correctly report payments to the IRS.
Form W-2 - Wage and Tax Statement
At the end of the year, you’ll send this form to employees, detailing their earnings and the taxes withheld. It's legally required and makes tax season a bit easier for your team.
Form 1099-MISC - Miscellaneous Income
This form reports payments made to independent contractors and other non-employees. It helps you and the IRS keep track of who gets paid what.
Form 8829 - Expenses for Business Use of Your Home
If you run your business from home, this form helps you deduct expenses like utilities, mortgage interest, and more. Every deduction counts when you're self-employed.
Form SS-4 - Application for Employer Identification Number (EIN)
You’ll use this form to apply for your business’s EIN—a must-have for most businesses. An EIN is like a Social Security number for your business. You’ll need it to open a bank account, apply for permits, and more.
Form 1065 - U.S. Return of Partnership Income
If you’re in a partnership, this is the form you’ll use to report the business’s income, gains, losses, deductions, and credits. Partnerships must file this form, even though the income passes to the partners.
Form 1120 - U.S. Corporation Income Tax Return
Corporations use this form to report their income, gains, losses, deductions, and credits. This is essential for filing corporate taxes if your business is a C corporation.
Form 1120S - U.S. Income Tax Return for an S Corporation
This form is similar to Form 1120 but for S corporations. It reports income, losses, deductions, and credits. S corporations file this to pass income to shareholders.
Connecticut State Forms for Small Businesses
If you’re running a business in Connecticut, you’ll need to be familiar with these state-specific forms:
CT-1040 - Connecticut Resident Income Tax Return
Used by Connecticut residents to file state income tax returns. Your federal taxes aren’t the end of the line—state taxes are due, too.
REG-1 - Business Taxes Registration Application
This form registers your business for Connecticut’s various business taxes. Getting registered is the first step in staying compliant with state tax laws.
Form OP-424 - Business Entity Tax Return
This form allows LLCs, LLPs, and S corporations to pay Connecticut's annual business entity tax. You might still owe this tax even if your business didn’t make any money.
Form CT-W4 - Employee’s Withholding Certificate
Your employees use this form to tell you how much state income tax to withhold from their paychecks. Ensuring accurate withholding helps avoid surprises at tax time.
Form OS-114 - Connecticut Sales and Use Tax Return
If your business sells goods or services in Connecticut, you’ll use this form to report and pay sales and use taxes. The state expects you to collect and remit these taxes, so don’t skip this.
Stay Organized
With so many forms to keep track of, organization is crucial. I recommend creating a calendar to remind you when each form is due or consider using accounting software (or a professional bookkeeper) that can help automate some of these tasks. If you ever feel overwhelmed, don’t hesitate to consult with your tax professional. They can provide personalized advice tailored to your specific business needs.
Feel free to reach out if you have any questions or need further clarification on these forms.
***Starting tax year 2023, if you have ten or more combined 1099s, W-2s or other federal forms to file, you must file them electronically. To learn more, see IRS and Treasury issue final regulations on e-file for businesses.***
