Small Business Tax Basics

Summary

This practice note provides an overview of small business taxation in general, and how small businesses report income or losses on IRS forms and schedules, including Schedule C of IRS Form 1040 (Schedule C), Form 1065, Form 1120-S (S corporations), and Form 1120 (C corporations). This note analyzes how a small business client should report key items, including types of small businesses, the tax advantages and disadvantages of particular entities, accounting periods, book versus tax income, estimated tax, self-employment tax, employment tax, and filing procedures.