{"id":656,"date":"2017-03-06T02:11:32","date_gmt":"2017-03-06T02:11:32","guid":{"rendered":"https:\/\/berleycpa.com\/?page_id=656"},"modified":"2023-12-16T07:19:52","modified_gmt":"2023-12-16T07:19:52","slug":"small-business-tax-overview","status":"publish","type":"page","link":"https:\/\/berleycpa.com\/tax-center\/small-business-tax-overview\/","title":{"rendered":"Small Business Tax Overview"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-page\" data-elementor-id=\"656\" class=\"elementor elementor-656\">\n\t\t\t\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-10c12159 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"10c12159\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-3abd1c62\" data-id=\"3abd1c62\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-4fa97bd6 elementor-widget elementor-widget-text-editor\" data-id=\"4fa97bd6\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.18.0 - 08-12-2023 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p>[vc_row full_width=&#8221;stretch_row_content_no_spaces&#8221;][vc_column][finance_heading title=&#8221;Small Business Tax Overview&#8221; image=&#8221;611&#8243;][\/vc_column][\/vc_row][vc_row desctop_pb=&#8221;padding-md-100b&#8221; tablets_pb=&#8221;padding-sm-50b&#8221; mobile_pb=&#8221;padding-xs-40b&#8221;][vc_column][vc_empty_space][finance_text_block style=&#8221;style3&#8243; title_tag=&#8221;h2&#8243; title=&#8221;Who is Self-Employed?&#8221;]<\/p><p>Generally, you are self-employed if any of the following apply to you.<\/p><ul><li>You carry on a trade or business as a\u00a0<a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/sole-proprietorships\" target=\"_blank\" rel=\"noopener\">sole proprietor<\/a>\u00a0or an\u00a0<a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/independent-contractor-defined\" target=\"_blank\" rel=\"noopener\">independent contractor<\/a>.<\/li><li>You are a member of a\u00a0<a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/partnerships\" target=\"_blank\" rel=\"noopener\">partnership<\/a>\u00a0that carries on a\u00a0<a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/business-activities\" target=\"_blank\" rel=\"noopener\">trade or business<\/a>.<\/li><li>You are otherwise in business for yourself (including a<a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/business-activities\" target=\"_blank\" rel=\"noopener\">part-time business<\/a>)<\/li><\/ul><p><strong>What are My Self-Employed Tax Obligations?<\/strong><\/p><p>As a self-employed individual, generally you are required to file an annual return and pay estimated tax quarterly.<\/p><p>Self-employed individuals generally must pay self-employment tax (SE tax) as well as income tax. SE tax is a Social Security and Medicare tax primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. In general, anytime the wording &#8220;self-employment tax&#8221; is used, it only refers to Social Security and Medicare taxes and not any other tax (like income tax).<\/p><p>Before you can determine if you are subject to self-employment tax and income tax, you must figure your net profit or net loss from your business. You do this by subtracting your business expenses from your business income. If your expenses are less than your income, the difference is net profit and becomes part of your income on page 1 of Form 1040. If your expenses are more than your income, the difference is a net loss. You usually can deduct your loss from gross income on page 1 of Form 1040. But in some situations your loss is limited. See\u00a0<a href=\"https:\/\/www.irs.gov\/uac\/about-publication-334\" target=\"_blank\" rel=\"noopener\">Pub. 334, Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ)<\/a>\u00a0for more information.<\/p><p>You have to file an income tax return if your net earnings from self-employment were $400 or more. If your net earnings from self-employment were less than $400, you still have to file an income tax return if you meet any other filing requirement listed in the\u00a0<a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/i1040gi.pdf\" target=\"_blank\" rel=\"noopener\">Form 1040 instructions<\/a>\u00a0(PDF).<\/p><p><strong>How Do I Make My Quarterly Payments?<\/strong><\/p><p>Estimated tax is the method used to pay Social Security and Medicare taxes and income tax, because you do not have an employer withholding these taxes for you.\u00a0<a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/f1040es.pdf\" target=\"_blank\" rel=\"noopener\">Form 1040-ES, Estimated Tax for Individuals<\/a>\u00a0(PDF), is used to figure these taxes. Form 1040-ES contains a worksheet that is similar to Form 1040. You will need your prior year\u2019s annual tax return in order to fill out Form 1040-ES.<\/p><p><strong>Am I Required to File an Information Return?<\/strong><\/p><p>If you made or received a payment as a small business or self-employed (individual), you are most likely required to file an\u00a0<a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/am-i-required-to-file-a-form-1099-or-other-information-return\" target=\"_blank\" rel=\"noopener\">information return<\/a>\u00a0to the IRS.<\/p><p><strong>Business Structures<\/strong><\/p><p>When beginning a business, you must decide what form of business entity to establish. Your form of business determines which income tax return form you have to file. The most common forms of business are the sole proprietorship, partnership, corporation, and S corporation. A Limited Liability Company (LLC) is a relatively new business structure allowed by state statute.<\/p><p><strong>Home Office Deduction<\/strong><\/p><p>If you use part of your home for business, you may be able to deduct expenses for the business use of your home. The\u00a0<a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/home-office-deduction\" target=\"_blank\" rel=\"noopener\">home office deduction<\/a>\u00a0is available for homeowners and renters, and applies to all types of homes.<\/p><p><strong>Husband and Wife Business &#8211; What is a Qualified Joint Venture?<\/strong><\/p><p><a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/husband-and-wife-business\" target=\"_blank\" rel=\"noopener\">Husband and Wife Business<\/a><br \/>The employment tax requirements for family employees may vary from those that apply to other employees. On this page we point out some issues to consider when operating a husband and wife business.<\/p><p><a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/election-for-husband-and-wife-unincorporated-businesses\" target=\"_blank\" rel=\"noopener\">Election for Husband and Wife Unincorporated Businesses<\/a><br \/>For tax years beginning after December 31, 2006, the Small Business and Work Opportunity Tax Act of 2007 (Public Law 110-28) provides that a &#8220;qualified joint venture,&#8221; whose only members are a husband and wife filing a joint return, can elect not to be treated as a partnership for Federal tax purposes.[\/finance_text_block][\/vc_column][\/vc_row]<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>[vc_row full_width=&#8221;stretch_row_content_no_spaces&#8221;][vc_column][finance_heading title=&#8221;Small Business Tax Overview&#8221; image=&#8221;611&#8243;][\/vc_column][\/vc_row][vc_row desctop_pb=&#8221;padding-md-100b&#8221; tablets_pb=&#8221;padding-sm-50b&#8221; mobile_pb=&#8221;padding-xs-40b&#8221;][vc_column][vc_empty_space][finance_text_block style=&#8221;style3&#8243; title_tag=&#8221;h2&#8243; title=&#8221;Who is Self-Employed?&#8221;] Generally, you are self-employed if any of the following apply to you. You carry on a trade or business as a\u00a0sole proprietor\u00a0or an\u00a0independent contractor. You are a member of a\u00a0partnership\u00a0that carries on a\u00a0trade or business. You are otherwise in business [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":631,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_seopress_robots_primary_cat":"","_seopress_titles_title":"","_seopress_titles_desc":"Navigate Small Business Tax: Self-employed? Learn tax obligations, quarterly payments, info returns, home office deduction, and more. 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