How to File Your Taxes: The Complete Guide to Business and Individual Tax Filing

How To File A Tax Return

To file your taxes, you can choose from one of three filing options:

1. Manual - fill out the correct IRS form according to your needs, then mail it in by the deadline
2. Electronic - use a tax software program or website, answer questions via the platform and allow them to file your return for you
3. Use a professional to help you with your filing

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Information Needed For Filing Your Taxes

To prepare for tax filing, it will be helpful to gather some information in advance to make the process easier.

Individual Tax Returns

Personal information

• The date of birth and social security number for you and your dependents
• A copy of your previous year's tax return
• Your bank account number and routing number (if you would like your tax return via direct deposit

Income Information

• W-2 - your employer will deliver a copy of your W-2 either via mail or online
• 1099 - if you do freelance or independent contract work, businesses will send a copy of your 1099s either via mail or online
• Information about alimony, business income, rental properties, and other miscellaneous income

Deduction Information

• Expense records - business expenses, home expenses, rental property expenses, investment interest expenses, medical expenses
• Child care, education, and adoption costs Charitable donation records

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Business Taxes

General Information

• EIN - Employee Identification Number, also called a Federal Tax Identification Number, which is used to identify your business for tax purposes

Income Information

• Income reports - sales records, returns & allowances

Deduction Information

• Expense reports - advertising, insurance, travel, internet, interest, depreciation, commissions
• Wage reports - Forms W-2, W-3, 1099, 1096 o Federal tax reports - Forms 940 and 941

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How Are Taxes Determined?

Individuals

Individual tax returns are taxed based on federal tax brackets. Your taxable income is divided into brackets with each portion taxed accordingly in a progressive tax rate. In the following example, we can see $100,000 of taxable income for someone with a single filing status.

How Are Businesses Taxed?

Businesses are taxed according to their structure and nature.

Sole Proprietorship 

"Pass-through" - income is reported on your personal tax return and taxed at a personal income tax rate for sole proprietors.

Subject to self-employment taxes for Medicare and social security.

LLC

LLCs have 2 options

1. "Pass-through" - can be taxed on your personal income tax returns and taxed as a sole proprietorship or partnership.
2. Can elect to be taxed as an S-Corp or a C-Corp at the corporate tax rate.

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Partnership

"Pass-through" - each partner is taxed on their own personal income tax return at a personal income tax rate and is subject to self-employment taxes.

S-Corp

"Pass-through" - shareholders report the business’ income on their own personal tax returns and the profit is subject to the personal income tax rate.

Salaries are subject to self-employment taxes.

Dividends, called distributions, are not taxable to shareholders.

C-Corp

"Double taxation" - the corporation is subject to an income tax rate of 21%, the shareholders get taxed again on their personal tax returns once the profits come as dividends.

Employee salary is subject to self-employment taxes.

Dividends are subject to dividend tax rates.

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Which Tax Forms Do I Need?

Business Tax Return Forms

Filing Based on the structure of your business, there are different IRS forms and attached schedules that you are required to file.

Employment Tax Return Forms

If you are an employer, you are required to report and deposit employment taxes to the IRS. Depending on your employees, you must submit the following forms, as well as Forms W-2 and W-3.

Excise Tax Return Forms

Depending on the nature of your business, you may need to pay indirect taxes on goods or services.

Individual Tax Return Forms

Your individual tax return is filed via the IRS form 1040.

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When Are My Taxes Due?

Knowing when and what is due is crucial for your tax preparation.

Initial Filing Deadlines & Extension Deadlines:

Individuals	April 15 - Filing Deadline October 15 - Extension Deadline
Partnerships	March 16 - Filing Deadline September 15 - Extension Deadline
S-Corps	March 16 - Filing Deadline September 15 - Extension Deadline
C-Corps	April 15 - Filing Deadline October 15 - Extension Deadline
Non-Profits, Charities,  Exempt Status	May 15 - Filing Deadline November 16 - Extension Deadline

Quarterly Payment Deadlines:

Quarter  1	April 15
Quarter 2	June 15
Quarter 3	September 15
Quarter 4 - Corporations	December 15
Quarter 4 - Individuals	January 15

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What If I Need An Extension? 

If you need to file an extension for your business or personal taxes, you can submit a form to the IRS that will allow you an extra 6 months to file. Partnerships, S-Corps, and C-Corps may all file an extension via the same form - a 7004. Individuals may file via a 4668. Non-profits may file via an 8868.

Do I Have To File Taxes?

Individuals

May not need to file a tax return if all of the following are true:

• Single
• Under 65
• Earn less than $12,200 of income (the standard deduction)
• No other special circumstances

S-Corp

Must pay estimated taxes if expected to owe more than $500 in business taxes annually

C-Corp

Must pay estimated taxes if expected to owe more than $500 in business taxes annually

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How Do I Pay My Taxes?

If you owe taxes to the IRS, regardless of when you file, your bill is due to be paid on your filing deadline. You will submit your payment when you file your taxes.

If you cannot pay the bill owed, the IRS can offer the following options:

1. Payment plans
2. Offer in compromise - Allows you to settle the debt for less than the full amount owed.
3. Form 656-B
4. Deferment - Delays the collection of the debt.

• Form 433-F (General)
• Form 433-A (Wage Earners & Self-Employed Individuals)
• Form 433-B (Businesses)

When Will I Recieve My Tax Return?

If you are eligible for a tax refund and have elected for a direct deposit, you should receive your tax return within 21 days, or 3 weeks, of filing your tax return online. You can also check the status of your tax refund 24 hours after you have filed your tax return online or 4 weeks after you have mailed your return manually.