Filing and Paying Business Taxes by ja2349


									8                                            Educate your community. Tell everyone about Oklahoma Small Business News.                                                                 OSBN - April, 2003
Legal Pad
Filing and Paying Business Taxes
BY DARIAN ANDERSEN                                                                                               Files You File To Report Taxes:
Attorney -                             Sole Proprietor
                                                        May be liable for:                                                         Use Form:
  Tax season! The easiest way to live through           Income Tax                                                                 1040 and Schedule C1 or C-EZ (Schedule F for farm business1)
tax season is to know what to do and to do it           Self-employment Tax                                                        1040 and Schedule SE
before the deadline. Words that are easier to           Estimated Tax                                                              1040-ES
say than do. But let’s talk about what to do.           Employment Taxes:
  You likely operate your business in one of            Social Security and Medicare taxes and income tax                          943 for Farm employees, 941 for all others
the following forms:                                      withholding
                                                        Federal Unemployment (FUTA) Taxes                                          940 or 940-EZ
1. Sole proprietorship
                                                        Depositing Employment Taxes, Excise Taxes                                  81092
2. Partnership
                                                        Excise Taxes                                                               See Excise Taxes
3. Limited liability company                            Partnership
4. S-corporation                                        Annual Return of Income                                                    1065
5. C-corporation                                        Employment Taxes                                                           Same as Sole Proprietor
    The form of business you operate                    Excise Taxes                                                               See Excise Taxes
determines what taxes you must pay and how              Partner in a Partnership (Individual)
you pay them. This article is short and gives           Income Tax                                                                 1040 and Schedule E3
some useful guidance but does not cover very            Self-Employment Tax                                                        1040 and Schedule SE
much of the whole subject of taxes for                  Estimated Tax                                                              1040-ES
                                                        Corporation or S Corporation
                                                        Income Tax                                                                 1120 or 1120-A (Corp.), 1120S (S Corp.)
The following chart appears in the IRS                                                                                                                      2
                                                        Estimated Tax                                                              1120-W (Corp.) and 8109
instruction sheet for small businesses:                 Employment Taxes                                                           Same as Sole Proprietor
   The four general kinds of business taxes             Excise Taxes                                                               See Excise Taxes
are:                                                    S Corporation Shareholder
Income Tax                                              Income Tax                                                                 1040 and Schedule E3
Self-Employment Tax                                     Self-Employment Tax                                                        1040 and Schedule SE
Employment Taxes                                        Estimated Tax                                                              1040-ES
                                                               1. File a separate schedule for each business. 2. Do not use if you deposit taxes electronically. 3. Various other schedules may be needed.
Excise Taxes

                                                           As a supplement to the chart (above), a              automatically. If you prepare your own tax         Payroll Taxes.
                               Specializing in:         limited liability company may elect to be               returns, then follow the same guidelines. I         When you file a Form SS-4 to obtain an
                                 • Desktop Publishing
                                   Training             taxed as a partnership, a corporation or a              believe it is important for you to know how      employer identification number (EIN) you
                                 • Filemaker Pro        disregarded entity. If the election is to have          the system works even if you rely on a tax       will be sent a coupon book on which you
                                   Database and Web
     Providing Computer Training
                                                        the limited liability company be taxed as a             preparer to file the tax returns.                can report payroll taxes withheld. Form 941
      in Oklahoma Since 1989                            corporation or a partnership, follow the                  Use the guidelines provided by the Internal    is required quarterly on or before April 30,
     Mac and PC Training classes offered in:            guidelines above. If it is a disregarded entity         Revenue Service (IRS) and the State Tax          July 31, October 31 and January 31.
      • Basic Mac         • Freehand
      • Filemaker Pro     • Microsoft Office            it is treated like a sole proprietorship for tax        Commission on the Internet. The addresses          Tax Returns.
      • Adobe Illustrator • QuarkXpress                 purposes.                                               are: and         Individual and partnership tax returns are
      • Adobe Pagemaker   • Scanning                       Now, the following information is the                Estimated Tax Payments.                          due April 15. Corporate tax returns are due
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                                                        practical way to comply. If you have a tax                 Individual. As an individual sole             March 15. Extensions can be filed with either
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                       If necessary, an extension can be obtained              income, you will have to make advance            months or partnership (Form 8736) tax
                                                                                                                payments of your estimated federal and state     returns, for 3 additional months. Electronic
                                                                                                                income taxes and federal self-employment         filers use Form 8878.
                                                                                                                tax once you start making a taxable profit.          Darian Andersen is an Attorney in
                                                                                                                Individual installments of estimated tax are     Edmond specializing in Small Business
                                                                                                                due April 15, June 15, September 15 and          Law. He can be reached at 405-330-2235.
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                                                              2525 NW Expressway                                lesser of 100% of the prior year’s tax for the
                                                                     Ste. 204                                   quarter or 90% of the estimated taxation.
                                                                Oklahoma City, OK                                 Corporate. The corporation must make           Call OSBN at 285-2352 for a current media kit.
                                                                  405/842-6215                                  estimated tax quarterly payments equal to a            Or, you can check out our web site at
                                                                Fax 405/842-8793                                quarter of 100% of the prior year’s tax or            
                                                                          100% of current tax, whichever is less. The
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                                                                                                                as for an individual but on Form 1120-W.

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