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All You Need to Know About Filing Federal Business Income Taxes

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Filing business income taxes can be a daunting task, but this checklist should make it easier. Where to file, when to file, what return to file, and how to avoid mistakes are covered in this article.

1. First, Find Good Tax Advice

Although you can prepare a simple Schedule C for your small business, other business tax forms are more complicated. Filing business taxes for a corporation or partnership involves many schedules you may not be familiar with, and you don't want to make a mistake on something this important. Even Schedule C can be complicated, if you want to include home office deductions. So, start your tax preparation for this year by looking for a reliable tax advisor. 

2. Where to Send Your Business Tax Return

Where you send your federal income tax return depends on (1) the type of return and (2) the state where you live and work.  Check out this list for links to find out where to send each type of return you must file.

3. When Your Business Tax Return is Due

Business federal income tax returns are due at different times, depending on the business type:

Returns for sole proprietorships, LLCs, and partnerships are due on April 15, along with your personal tax return.

Returns for corporations, including s corporations, are due March 15.

EXCEPTIONS: If April 15 falls on a weekend or holiday, the due date is the next regular business day. In some cases, a federal or state holiday may also postpone the due date. For example, in 2011, Washington, D.C. celebrates a holiday on Monday, April 16, so tax due date for all federal personal tax returns in 2011 is Tuesday, April 17.

4. Make Sure Your Business Tax Return is Received On Time

How do you know the IRS received your return?  When does the IRS consider a return to be sent?  Can you send a return by private delivery service (UPS, FedEx, etc.)?  Before you file your return, here are some tips to help you make sure you get credit for filing on time. 

5. Which Tax Return to Use For Your Business Income Taxes

If you are a sole proprietor or single-member LLC, you file the federal income tax return for your business on Schedule C, along with your personal tax return. 

If you are a partner in a partnership, the partnership files a tax return and you file a Schedule K-1 showing your share of the partnership income or loss on your personal tax return.

If you are a shareholder in an s corporation, the corporate tax return is filed separately, and you receive a Schedule K-1 showing your share of the corporation's profits or losses.

For more information on the forms to use, read the article above.

6. How to Use E-File for Your Business Tax Return

You can use the IRS's E-File program to file your business income tax, payroll taxes, and other federal taxes.  E-File is available from a list of vendors, including the major tax software vendors.  Read more about how to E-File your business tax return.

7. Common Business Tax Return Mistakes

The 5 top business tax return errors are:

  1. Incorrect or missing social security numbers or employer ID numbers.
  2. Incorrect tax entered based on taxable income and filing status
  3. Computation errors in figuring the taxable income, withholding and estimated tax payments, and common credits and deductions.
  4. Withholding and estimated tax payments entered on the wrong line, and
  5. Math Errors. Both addition and subtraction.

But there are more.  Use this list to check your return for errors before you file.

8. How to Correct Common Business Tax Return Mistakes

Most business tax return mistakes are correctable.  For example, if you make a calculation error, the IRS will make the necessary changes.  Read about what to do if you make a mistake on your business tax return.

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