The Internal Revenue Service is no joke. Whether you’re running a small business or a corporation, the IRS has many forms that will require your attention in the coming months and years.
Your company is subject to various tax regulations, including withholding taxes for employees, payroll taxes for PEO clients, and federal/state taxes on sales, property, and equipment. Learning about these forms can help protect you from mistakes and save time, money, and aggravation.
This article will discuss nine important IRS documents that every employer should know about.
1. Form W-2
W-2s are a must for every business owner — no matter the size, and one of the things every startup company should know about filing taxes. It’s the most common form used to report employee earnings and taxes withheld. The IRS wants to know what was paid out as dividends and how much was left over after taxes.
The most important part of a correctly completed W-2 form is accuracy. If you’re new to this, your first job is to ensure you’ve printed the correct form for your filing. One excellent way is using an established online resource to create a W2 Online, so you don’t have to deal with costly errors with the online fillable PDF form alternatives.
2. Form W-3
Form W-3 is an income tax withholding form. It’s filed by the employer to report on tax amounts deducted from the employee’s earnings. In addition, the form is used to determine whether you owe money to the IRS and should be filing taxes.
The W-3 form also calculates federal payroll taxes and makes quarterly deposits. If you’re self-employed, you’ll need to use this form when reporting your earnings to the IRS every quarter.
3. Form W-4
The IRS Form W-4 is a tax form for employees to fill out, which determines how much income tax the employee owes. Employees and employers use the form to calculate the income tax the employer will withhold from wages.
The Form W-4 determines how much income tax an employee will pay on their wages. This form is filled out by the employee and submitted to their employer. The employer then uses this information when calculating their taxes, which are then paid to the IRS.
4. Form W-9
Form W-9 is a tax form that businesses use to request for the tax identification number of an individual or entity to process the taxpayer’s U.S. income tax return.
Form W-9 requires all U.S. employers to collect tax information from employees, independent contractors, and other parties who must file a federal tax return and pay taxes with the IRS.
As one of the methods of leveraging the tax management process, many businesses use the IRS Form W-9 as part of their payroll services. However, these small businesses don’t have the resources to provide this information directly to their employees or independent contractors on their own.
5. Form I-9
The IRS requires that you file a Form I-9 for each employee you hire. In addition, you’re required to obtain a new Form I-9 for each employee you hire and periodically for any existing employees.
The Employment Eligibility Verification form determines if the person is eligible to work in the United States. If not, it must be stamped “not acceptable” and returned to the employer with an explanation of why it was rejected. If a document is missing or incorrect, it can delay your business’ ability to function correctly.
6. Form 1040
This form is used to file your business taxes. You will need to use this form if you have employees or do not have employees but have a business that requires you to file quarterly. The IRS requires you to file this form every year for all businesses.
You need to include information about your business on this form, including how much money was spent on advertising. You’ll also include other expenses and what percentage of the profits went back into the company. You also need to include information about how many employees work for your company and how much they earn.
7. Form 1120
Form 1120 is the annual information return for business owners. You must complete this form if you have a business with $500,000 or more in gross receipts. It reports financial and other information about your business, including profits and losses, investments, depreciation and amortization, taxes paid, and more.
This form is intended for businesses intending to make deductions on their profit for the year. If your business doesn’t make money, you won’t have the income to report on this form, and you can’t take any deductions related to your business activity.
8. Form 1065
Form 1065 is a U.S. Return of Partnership Income Tax Return. Partnerships use it with a U.S. owner at any point during the tax year and partnerships that file an entity tax return (Form 1120) with a U.S. owner at any point during the year.
In addition, partnerships that file an entity tax return (Form 1120) with a foreign owner at any point during the year also need to file a Form 1065.
The partnership must file Form 1065 if it has either net income from sources within the United States or accumulated earnings and profits from sources within the United States that exceed 25 percent of its total assets (for corporations).
9. Form 941
Form 941 is a quarterly tax form that businesses must file with the IRS. This form reports the income received and expenses incurred during the quarter. Form 941 will help you pay federal income and employee payroll taxes and is filed in addition to Form W-2, which reports your employees’ earned wages.
It is essential to complete this form because it contains information that can help you calculate your amount of payroll taxes. This information includes withholding and Social Security. You will also need this form if you want to change your deduction or exemption amounts on Form W-4 (which is required for employees).
This article should’ve given you a brief overview of the nine most important IRS forms to help get your small business off the ground. It’s essential that you stay up to date on these forms so you can correctly file your taxes. It’s also vital that you know the consequences of filing late. The last thing you want to be doing is living in fear of an audit when your taxes are due.