File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Irs 1040ez Form Online

Amendment Form For Taxes1040ez Form OnlineOnline Tax Filing 20122010 State Tax FormsTaxact Online FreeWww Irs Gov Efile2012 1040ez Tax FormH & R Block Free FileFree Tax Filing For Low IncomeTaxact 1040ezCorporate Tax SoftwareFree Tax ServiceCan I Efile My 2012 Tax ReturnE File Tax ReturnsHr Block 2011 TaxesTax AmendmentAmmended Tax ReturnFile 2011 TaxFreetaxusa2011Taxes H&r Block Online1040nr Online FreeFree State Tax File OnlineVisit Www Irs Gov FreefileFile Previous Years Tax ReturnsH&r Block Taxes Online FreeFree Federal And State TaxesFree File Amended Tax Return1040ez FilingCan I File 2010 Taxes In 2012How Do I Ammend My TaxesPrint State Tax FormCan I Efile 1040nrAmend 2011 Tax Return FreeIrs Form 1040ez 2011File Prior Year Taxes OnlineFill Out 1040x OnlineIrs Tax ExtensionDo I File My Taxes Free Online2012 Tax Tables Federal1040 Ez 2011

Irs 1040ez Form Online

Irs 1040ez form online Part Three -   Quarterly Filing Information Table of Contents 12. Irs 1040ez form online   Filing Form 720Attachments to Form 720. Irs 1040ez form online Conditions to allowance. Irs 1040ez form online 13. Irs 1040ez form online   Payment of TaxesHow To Make Deposits When To Make Deposits Amount of DepositsSafe Harbor Rule 14. Irs 1040ez form online   Penalties and Interest 15. Irs 1040ez form online   Examination and Appeal Procedures 16. Irs 1040ez form online   Rulings Program 17. Irs 1040ez form online   How To Get Tax Help 18. Irs 1040ez form online   Appendix Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

SOI Tax Stats - International Business Tax Statistics

Return to Tax Stats home page

Here you will find links to the Statistics of Income studies relating to the international business sector. For each of these areas, there are text articles and/or statistical tables that include both recent and historical data.

International Individual Tax Statistics

Overview of U.S. Taxes on International Income

 

Controlled Foreign Corporations Provides data on activities of foreign corporations controlled by U.S. corporations. Data are taken from Form 5471.

Corporate Foreign Tax Credits

Corporate Foreign Tax Credit, Tax Year 2010 One Sheet

Provides data on foreign income and taxes reported by U.S. corporations claiming foreign tax credits. These credits are claimed to reduce or eliminate the double taxation of income earned overseas.  Data are taken from Form 1118.
Foreign Controlled Domestic Corporations Provides data on U.S. corporations with 50-percent-or-more stock ownership by a single foreign "person."  Covers balance sheet, income statement, and tax-related data.  Data are taken from Form 1120 series.
Foreign Corporations with U.S. Business Operations Provides data on foreign corporations with income connected to a U.S. trade or business.  Covers income statement and selected tax items.  Data are taken from Form 1120-F
Foreign Sales Corporations/IC-DISC'S Foreign Sales Corporations (FSC's) are foreign companies created by a "parent" shareholder to derive tax benefits from the export of U.S. products.  Interest-Charge Domestic Sales Corporations (IC-DISC's) are domestic companies created for a similar purpose.  Data are taken from Forms 1120-FSC and 1120-IC DISC.
Foreign Trusts Provides data on foreign trusts that have U.S. "persons" as grantors, transferors, or beneficiaries.  This study is conducted every 4 years.  Data are taken from Forms 3520 and 3520-A.
International Boycotts Provides data on the business operations of U.S. entities that participate in international economic boycotts not sanctioned by the U.S. Government.  Data are taken from Form 5713.

One-Time Dividend Received Deduction

Provides data on a one-time deduction of extraordinary qualifying cash dividends received from controlled foreign corporations. U.S. corporations were eligible to claim this deduction for accounting periods ending between October 2004 and October 2006.  Data are taken from Form 8895.

Transactions of Foreign-Owned Corporations

Provides data on financial transactions (such as stock purchases or interest payments) between U.S. corporations and their foreign owners.  This study is conducted every 2 years.  Data are taken from Form 5472.

U.S. Possessions Corporations Provides data on income statements, balance sheets, tax, and "possessions tax credit" for qualifying U.S. possessions corporations.  Most of these corporations are located in Puerto Rico.  The Statistics of Income Division no longer conducts a study on U.S. Possessions Corporations.  Data are taken from Forms 1120, 5712, and 5735.
Page Last Reviewed or Updated: 29-Jan-2014

The Irs 1040ez Form Online

Irs 1040ez form online Publication 583 - Main Content Table of Contents What New Business Owners Need To Know Forms of BusinessMore information. Irs 1040ez form online More information. Irs 1040ez form online Exception—Community Income. Irs 1040ez form online Exception—Qualified joint venture. Irs 1040ez form online More information. Irs 1040ez form online More information. Irs 1040ez form online Identification NumbersEmployer Identification Number (EIN) Payee's Identification Number Tax Year Accounting Method Business TaxesIncome Tax Self-Employment Tax Employment Taxes Excise Taxes Depositing Taxes Information Returns PenaltiesWaiver of penalty. Irs 1040ez form online Business ExpensesBusiness Start-Up Costs Depreciation Business Use of Your Home Car and Truck Expenses RecordkeepingWhy Keep Records? Kinds of Records To Keep How Long To Keep Records Sample Record System How to Get More InformationInternal Revenue Service Small Business Administration Other Federal Agencies What New Business Owners Need To Know As a new business owner, you need to know your federal tax responsibilities. Irs 1040ez form online Table 1 can help you learn what those responsibilities are. Irs 1040ez form online Ask yourself each question listed in the table, then see the related discussion to find the answer. Irs 1040ez form online In addition to knowing about federal taxes, you need to make some basic business decisions. Irs 1040ez form online Ask yourself: What are my financial resources? What products and services will I sell? How will I market my products and services? How will I develop a strategic business plan? How will I manage my business on a day-to-day basis? How will I recruit employees? The Small Business Administration (SBA) is a federal agency that can help you answer these types of questions. Irs 1040ez form online For information on how to contact the SBA, see How to Get More Information, later. Irs 1040ez form online Forms of Business The most common forms of business are the sole proprietorship, partnership, and corporation. Irs 1040ez form online When beginning a business, you must decide which form of business to use. Irs 1040ez form online Legal and tax considerations enter into this decision. Irs 1040ez form online Only tax considerations are discussed in this publication. Irs 1040ez form online Your form of business determines which income tax return form you have to file. Irs 1040ez form online See Table 2 to find out which form you have to file. Irs 1040ez form online Sole proprietorships. Irs 1040ez form online   A sole proprietorship is an unincorporated business that is owned by one individual. Irs 1040ez form online It is the simplest form of business organization to start and maintain. Irs 1040ez form online The business has no existence apart from you, the owner. Irs 1040ez form online Its liabilities are your personal liabilities. Irs 1040ez form online You undertake the risks of the business for all assets owned, whether or not used in the business. Irs 1040ez form online You include the income and expenses of the business on your personal tax return. Irs 1040ez form online More information. Irs 1040ez form online   For more information on sole proprietorships, see Publication 334, Tax Guide for Small Business. Irs 1040ez form online If you are a farmer, see Publication 225, Farmer's Tax Guide. Irs 1040ez form online Partnerships. Irs 1040ez form online   A partnership is the relationship existing between two or more persons who join to carry on a trade or business. Irs 1040ez form online Each person contributes money, property, labor, or skill, and expects to share in the profits and losses of the business. Irs 1040ez form online   A partnership must file an annual information return to report the income, deductions, gains, losses, etc. Irs 1040ez form online , from its operations, but it does not pay income tax. Irs 1040ez form online Instead, it “passes through” any profits or losses to its partners. Irs 1040ez form online Each partner includes his or her share of the partnership's items on his or her tax return. Irs 1040ez form online More information. Irs 1040ez form online   For more information on partnerships, see Publication 541, Partnerships. Irs 1040ez form online Husband and wife business. Irs 1040ez form online   If you and your spouse jointly own and operate an unincorporated business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. Irs 1040ez form online Do not use Schedule C or C-EZ. Irs 1040ez form online Instead, file Form 1065, U. Irs 1040ez form online S. Irs 1040ez form online Return of Partnership Income. Irs 1040ez form online For more information, see Publication 541, Partnerships. Irs 1040ez form online Exception—Community Income. Irs 1040ez form online   If you and your spouse wholly own an unincorporated business as community property under the community property laws of a state, foreign country, or U. Irs 1040ez form online S. Irs 1040ez form online possession, you can treat the business either as a sole proprietorship or a partnership. Irs 1040ez form online The only states with community property laws are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Irs 1040ez form online A change in your reporting position will be treated as a conversion of the entity. Irs 1040ez form online Exception—Qualified joint venture. Irs 1040ez form online   If you and your spouse each materially participate as the only members of a jointly owned and operated business, and you file a joint return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership for the tax year. Irs 1040ez form online Making this election will allow you to avoid the complexity of Form 1065 but still give each spouse credit for social security earnings on which retirement benefits are based. Irs 1040ez form online For an explanation of "material participation," see the Instructions for Schedule C, line G. Irs 1040ez form online   To make this election, you must divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse in accordance with your respective interests in the venture. Irs 1040ez form online Each of you must file a separate Schedule C or C-EZ and a separate Schedule SE. Irs 1040ez form online For more information, see Qualified Joint Venture in the Instructions for Schedule SE. Irs 1040ez form online Corporations. Irs 1040ez form online   In forming a corporation, prospective shareholders exchange money, property, or both, for the corporation's capital stock. Irs 1040ez form online A corporation generally takes the same deductions as a sole proprietorship to figure its taxable income. Irs 1040ez form online A corporation can also take special deductions. Irs 1040ez form online   The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. Irs 1040ez form online However, shareholders cannot deduct any loss of the corporation. Irs 1040ez form online More information. Irs 1040ez form online   For more information on corporations, see Publication 542, Corporations. Irs 1040ez form online S corporations. Irs 1040ez form online   An eligible domestic corporation can avoid double taxation (once to the corporation and again to the shareholders) by electing to be treated as an S corporation. Irs 1040ez form online Generally, an S corporation is exempt from federal income tax other than tax on certain capital gains and passive income. Irs 1040ez form online On their tax returns, the S corporation's shareholders include their share of the corporation's separately stated items of income, deduction, loss, and credit, and their share of nonseparately stated income or loss. Irs 1040ez form online More information. Irs 1040ez form online   For more information on S corporations, see the instructions for Form 2553, Election by a Small Business Corporation, and Form 1120S, U. Irs 1040ez form online S. Irs 1040ez form online Income Tax Return for an S Corporation. Irs 1040ez form online Limited liability company. Irs 1040ez form online   A limited liability company (LLC) is an entity formed under state law by filing articles of organization as an LLC. Irs 1040ez form online The members of an LLC are not personally liable for its debts. Irs 1040ez form online An LLC may be classified for federal income tax purposes as either a partnership, a corporation, or an entity disregarded as an entity separate from its owner by applying the rules in regulations section 301. Irs 1040ez form online 7701-3. Irs 1040ez form online For more information, see the instructions for Form 8832, Entity Classification Election. Irs 1040ez form online Identification Numbers You must have a taxpayer identification number so the IRS can process your returns. Irs 1040ez form online The two most common kinds of taxpayer identification numbers are the social security number (SSN) and the employer identification number (EIN). Irs 1040ez form online An SSN is issued to individuals by the Social Security Administration (SSA) and is in the following format: 000–00–0000. Irs 1040ez form online An EIN is issued to individuals (sole proprietors), partnerships, corporations, and other entities by the IRS and is in the following format: 00–0000000. Irs 1040ez form online You must include your taxpayer identification number (SSN or EIN) on all returns and other documents you send to the IRS. Irs 1040ez form online You must also furnish your number to other persons who use your identification number on any returns or documents they send to the IRS. Irs 1040ez form online This includes returns or documents filed to report the following information. Irs 1040ez form online Interest, dividends, royalties, etc. Irs 1040ez form online , paid to you. Irs 1040ez form online Any amount paid to you as a dependent care provider. Irs 1040ez form online Certain other amounts paid to you that total $600 or more for the year. Irs 1040ez form online If you do not furnish your identification number as required, you may be subject to penalties. Irs 1040ez form online See Penalties, later. Irs 1040ez form online Employer Identification Number (EIN) EINs are used to identify the tax accounts of employers, certain sole proprietors, corporations, partnerships, estates, trusts, and other entities. Irs 1040ez form online If you don't already have an EIN, you need to get one if you: Have employees, Have a qualified retirement plan, Operate your business as a corporation or partnership, or File returns for: Employment taxes, or Excise taxes. Irs 1040ez form online Applying for an EIN. Irs 1040ez form online   You may apply for an EIN: Online—Click on the EIN link at www. Irs 1040ez form online irs. Irs 1040ez form online gov/businesses/small. Irs 1040ez form online The EIN is issued immediately once the application information is validated. Irs 1040ez form online By telephone at 1-800-829-4933. Irs 1040ez form online By mailing or faxing Form SS-4, Application for Employer Identification Number. Irs 1040ez form online When to apply. Irs 1040ez form online   You should apply for an EIN early enough to receive the number by the time you must file a return or statement or make a tax deposit. Irs 1040ez form online If you apply by mail, file Form SS-4 at least 4 weeks before you need an EIN. Irs 1040ez form online If you apply by telephone or through the IRS website, you can get an EIN immediately. Irs 1040ez form online If you apply by fax, you can get an EIN within 4 business days. Irs 1040ez form online   If you do not receive your EIN by the time a return is due, file your return anyway. Irs 1040ez form online Write “Applied for” and the date you applied for the number in the space for the EIN. Irs 1040ez form online Do not use your social security number as a substitute for an EIN on your tax returns. Irs 1040ez form online More than one EIN. Irs 1040ez form online   You should have only one EIN. Irs 1040ez form online If you have more than one EIN and are not sure which to use, contact the Internal Revenue Service Center where you file your return. Irs 1040ez form online Give the numbers you have, the name and address to which each was assigned, and the address of your main place of business. Irs 1040ez form online The IRS will tell you which number to use. Irs 1040ez form online More information. Irs 1040ez form online   For more information about EINs, see Publication 1635, Understanding Your EIN. Irs 1040ez form online Payee's Identification Number In the operation of a business, you will probably make certain payments you must report on information returns (discussed later under Information Returns). Irs 1040ez form online The forms used to report these payments must include the payee's identification number. Irs 1040ez form online Employee. Irs 1040ez form online   If you have employees, you must get an SSN from each of them. Irs 1040ez form online Record the name and SSN of each employee exactly as they are shown on the employee's social security card. Irs 1040ez form online If the employee's name is not correct as shown on the card, the employee should request a new card from the SSA. Irs 1040ez form online This may occur, for example, if the employee's name has changed due to marriage or divorce. Irs 1040ez form online   If your employee does not have an SSN, he or she should file Form SS-5, Application for a Social Security Card, with the SSA. Irs 1040ez form online This form is available at SSA offices or by calling 1-800-772-1213. Irs 1040ez form online It is also available from the SSA website at www. Irs 1040ez form online ssa. Irs 1040ez form online gov. Irs 1040ez form online Other payee. Irs 1040ez form online   If you make payments to someone who is not your employee and you must report the payments on an information return, get that person's SSN. Irs 1040ez form online If you make reportable payments to an organization, such as a corporation or partnership, you must get its EIN. Irs 1040ez form online   To get the payee's SSN or EIN, use Form W-9, Request for Taxpayer Identification Number and Certification. Irs 1040ez form online This form is available from IRS offices or by calling 1-800-829-3676. Irs 1040ez form online It is also available from the IRS website at IRS. Irs 1040ez form online gov. Irs 1040ez form online    If the payee does not provide you with an identification number, you may have to withhold part of the payments as backup withholding. Irs 1040ez form online For information on backup withholding, see the Form W-9 instructions and the General Instructions for Certain Information Returns. Irs 1040ez form online Tax Year You must figure your taxable income and file an income tax return based on an annual accounting period called a tax year. Irs 1040ez form online A tax year is usually 12 consecutive months. Irs 1040ez form online There are two kinds of tax years. Irs 1040ez form online Calendar tax year. Irs 1040ez form online A calendar tax year is 12 consecutive months beginning January 1 and ending December 31. Irs 1040ez form online Fiscal tax year. Irs 1040ez form online A fiscal tax year is 12 consecutive months ending on the last day of any month except December. Irs 1040ez form online A 52-53-week tax year is a fiscal tax year that varies from 52 to 53 weeks but does not have to end on the last day of a month. Irs 1040ez form online If you file your first tax return using the calendar tax year and you later begin business as a sole proprietor, become a partner in a partnership, or become a shareholder in an S corporation, you must continue to use the calendar year unless you get IRS approval to change it or are otherwise allowed to change it without IRS approval. Irs 1040ez form online You must use a calendar tax year if: You keep no books. Irs 1040ez form online You have no annual accounting period. Irs 1040ez form online Your present tax year does not qualify as a fiscal year. Irs 1040ez form online You are required to use a calendar year by a provision of the Internal Revenue Code or the Income Tax Regulations. Irs 1040ez form online For more information, see Publication 538, Accounting Periods and Methods. Irs 1040ez form online First-time filer. Irs 1040ez form online   If you have never filed an income tax return, you can adopt either a calendar tax year or a fiscal tax year. Irs 1040ez form online You adopt a tax year by filing your first income tax return using that tax year. Irs 1040ez form online You have not adopted a tax year if you merely did any of the following. Irs 1040ez form online Filed an application for an extension of time to file an income tax return. Irs 1040ez form online Filed an application for an employer identification number. Irs 1040ez form online Paid estimated taxes for that tax year. Irs 1040ez form online Changing your tax year. Irs 1040ez form online   Once you have adopted your tax year, you may have to get IRS approval to change it. Irs 1040ez form online To get approval, you must file Form 1128, Application To Adopt, Change, or Retain a Tax Year. Irs 1040ez form online You may have to pay a fee. Irs 1040ez form online For more information, see Publication 538. Irs 1040ez form online Accounting Method An accounting method is a set of rules used to determine when and how income and expenses are reported. Irs 1040ez form online You choose an accounting method for your business when you file your first income tax return. Irs 1040ez form online There are two basic accounting methods. Irs 1040ez form online Cash method. Irs 1040ez form online Under the cash method, you report income in the tax year you receive it. Irs 1040ez form online You usually deduct or capitalize expenses in the tax year you pay them. Irs 1040ez form online Accrual method. Irs 1040ez form online Under an accrual method, you generally report income in the tax year you earn it, even though you may receive payment in a later year. Irs 1040ez form online You deduct or capitalize expenses in the tax year you incur them, whether or not you pay them that year. Irs 1040ez form online For other methods, see Publication 538. Irs 1040ez form online If you need inventories to show income correctly, you must generally use an accrual method of accounting for purchases and sales. Irs 1040ez form online Inventories include goods held for sale in the normal course of business. Irs 1040ez form online They also include raw materials and supplies that will physically become a part of merchandise intended for sale. Irs 1040ez form online Inventories are explained in Publication 538. Irs 1040ez form online Certain small business taxpayers can use the cash method of accounting and can also account for inventoriable items as materials and supplies that are not incidental. Irs 1040ez form online For more information, see Publication 538. Irs 1040ez form online You must use the same accounting method to figure your taxable income and to keep your books. Irs 1040ez form online Also, you must use an accounting method that clearly shows your income. Irs 1040ez form online In general, any accounting method that consistently uses accounting principles suitable for your trade or business clearly shows income. Irs 1040ez form online An accounting method clearly shows income only if it treats all items of gross income and expense the same from year to year. Irs 1040ez form online More than one business. Irs 1040ez form online   When you own more than one business, you can use a different accounting method for each business if the method you use for each clearly shows your income. Irs 1040ez form online You must keep a complete and separate set of books and records for each business. Irs 1040ez form online Changing your method of accounting. Irs 1040ez form online   Once you have set up your accounting method, you must generally get IRS approval before you can change to another method. Irs 1040ez form online A change in accounting method not only includes a change in your overall system of accounting, but also a change in the treatment of any material item. Irs 1040ez form online For examples of changes that require approval and information on how to get approval for the change, see Publication 538. Irs 1040ez form online Business Taxes The form of business you operate determines what taxes you must pay and how you pay them. Irs 1040ez form online The following are the four general kinds of business taxes. Irs 1040ez form online Income tax. Irs 1040ez form online Self-employment tax. Irs 1040ez form online Employment taxes. Irs 1040ez form online Excise taxes. Irs 1040ez form online See Table 2 for the forms you file to report these taxes. Irs 1040ez form online You may want to get Publication 509. Irs 1040ez form online It has tax calendars that tell you when to file returns and make tax payments. Irs 1040ez form online Income Tax All businesses except partnerships must file an annual income tax return. Irs 1040ez form online Partnerships file an information return. Irs 1040ez form online Which form you use depends on how your business is organized. Irs 1040ez form online See Table 2 to find out which return you have to file. Irs 1040ez form online The federal income tax is a pay-as-you-go tax. Irs 1040ez form online You must pay the tax as you earn or receive income during the year. Irs 1040ez form online An employee usually has income tax withheld from his or her pay. Irs 1040ez form online If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. Irs 1040ez form online If you are not required to make estimated tax payments, you may pay any tax due when you file your return. Irs 1040ez form online Table 2. Irs 1040ez form online Which Forms Must I File? IF you are a. Irs 1040ez form online . Irs 1040ez form online . Irs 1040ez form online   THEN you may be liable for. Irs 1040ez form online . Irs 1040ez form online . Irs 1040ez form online   Use Form. Irs 1040ez form online . Irs 1040ez form online . Irs 1040ez form online Sole proprietor   Income tax   1040 and Schedule C 1 or C-EZ (Schedule F 1 for farm business)     Self-employment tax   1040 and Schedule SE     Estimated tax   1040-ES     Employment taxes:         • Social security and Medicare   taxes and income tax   withholding   941 or 944 (943 for farm employees)     • Federal unemployment (FUTA)   tax   940     Excise taxes   See Excise Taxes Partnership   Annual return of income   1065     Employment taxes   Same as sole proprietor     Excise taxes   See Excise Taxes Partner in a partnership (individual)   Income tax   1040 and Schedule E 2     Self-employment tax   1040 and Schedule SE     Estimated tax   1040-ES Corporation or S corporation   Income tax   1120 (corporation) 2  1120S (S corporation) 2     Estimated tax   1120-W (corporation only)     Employment taxes   Same as sole proprietor     Excise taxes   See Excise Taxes S corporation shareholder   Income tax   1040 and Schedule E 2     Estimated tax   1040-ES 1 File a separate schedule for each business. Irs 1040ez form online 2 Various other schedules may be needed. Irs 1040ez form online Estimated tax. Irs 1040ez form online   Generally, you must pay taxes on income, including self-employment tax (discussed next), by making regular payments of estimated tax during the year. Irs 1040ez form online Sole proprietors, partners, and S corporation shareholders. Irs 1040ez form online   You generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return. Irs 1040ez form online Use Form 1040-ES, Estimated Tax for Individuals, to figure and pay your estimated tax. Irs 1040ez form online For more information, see Publication 505, Tax Withholding and Estimated Tax. Irs 1040ez form online Corporations. Irs 1040ez form online   You generally have to make estimated tax payments for your corporation if you expect it to owe tax of $500 or more when you file its return. Irs 1040ez form online Use Form 1120-W, Estimated Tax for Corporations, to figure the estimated tax. Irs 1040ez form online You must deposit the payments as explained later under Depositing Taxes. Irs 1040ez form online For more information, see Publication 542. Irs 1040ez form online Self-Employment Tax Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. Irs 1040ez form online Your payments of SE tax contribute to your coverage under the social security system. Irs 1040ez form online Social security coverage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medicare) benefits. Irs 1040ez form online You must pay SE tax and file Schedule SE (Form 1040) if either of the following applies. Irs 1040ez form online Your net earnings from self-employment were $400 or more. Irs 1040ez form online You had church employee income of $108. Irs 1040ez form online 28 or more. Irs 1040ez form online Use Schedule SE (Form 1040) to figure your SE tax. Irs 1040ez form online For more information, see Publication 334, Tax Guide for Small Business. Irs 1040ez form online You can deduct a portion of your SE tax as an adjustment to income on your Form 1040. Irs 1040ez form online The Social Security Administration (SSA) time limit for posting self-employment income. Irs 1040ez form online   Generally, the SSA will give you credit only for self-employment income reported on a tax return filed within 3 years, 3 months, and 15 days after the tax year you earned the income. Irs 1040ez form online If you file your tax return or report a change in your self-employment income after this time limit, the SSA may change its records, but only to remove or reduce the amount. Irs 1040ez form online The SSA will not change its records to increase your self-employment income. Irs 1040ez form online Employment Taxes This section briefly discusses the employment taxes you must pay, the forms you must file to report them, and other forms that must be filed when you have employees. Irs 1040ez form online Employment taxes include the following. Irs 1040ez form online Social security and Medicare taxes. Irs 1040ez form online Federal income tax withholding. Irs 1040ez form online Federal unemployment (FUTA) tax. Irs 1040ez form online If you have employees, you will need to get Publication 15, Circular E, Employer's Tax Guide. Irs 1040ez form online If you have agricultural employees, get Publication 51, Circular A, Agricultural Employer's Tax Guide. Irs 1040ez form online These publications explain your tax responsibilities as an employer. Irs 1040ez form online If you are not sure whether the people working for you are your employees, see Publication 15-A, Employer's Supplemental Tax Guide. Irs 1040ez form online That publication has information to help you determine whether an individual is an employee or an independent contractor. Irs 1040ez form online If you classify an employee as an independent contractor, you can be held liable for employment taxes for that worker plus a penalty. Irs 1040ez form online An independent contractor is someone who is self-employed. Irs 1040ez form online Generally, you do not have to withhold or pay any taxes on payments to an independent contractor. Irs 1040ez form online Federal Income, Social Security, and Medicare Taxes You generally must withhold federal income tax from your employee's wages. Irs 1040ez form online To figure how much federal income tax to withhold from each wage payment, use the employee's Form W-4 (discussed later under Hiring Employees) and the methods described in Publication 15. Irs 1040ez form online Social security and Medicare taxes pay for benefits that workers and their families receive under the Federal Insurance Contributions Act (FICA). Irs 1040ez form online Social security tax pays for benefits under the old-age, survivors, and disability insurance part of FICA. Irs 1040ez form online Medicare tax pays for benefits under the hospital insurance part of FICA. Irs 1040ez form online You withhold part of these taxes from your employee's wages and you pay a part yourself. Irs 1040ez form online To find out how much social security and Medicare tax to withhold and to pay, see Publication 15. Irs 1040ez form online Which form do I file?   Report these taxes on Form 941, Employer's QUARTERLY Federal Tax Return, or Form 944, Employer's ANNUAL Federal Tax Return. Irs 1040ez form online (Farm employers use Form 943, Employer's Annual Federal Tax Return for Agricultural Employees. Irs 1040ez form online ) Federal Unemployment (FUTA) Tax The federal unemployment tax is part of the federal and state program under the Federal Unemployment Tax Act (FUTA) that pays unemployment compensation to workers who lose their jobs. Irs 1040ez form online You report and pay FUTA tax separately from social security and Medicare taxes and withheld income tax. Irs 1040ez form online You pay FUTA tax only from your own funds. Irs 1040ez form online Employees do not pay this tax or have it withheld from their pay. Irs 1040ez form online Which form do I file?   Report federal unemployment tax on Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. Irs 1040ez form online See Publication 15 to find out if you can use this form. Irs 1040ez form online Hiring Employees Have the employees you hire fill out Form I-9 and Form W-4. Irs 1040ez form online Form I-9. Irs 1040ez form online   You must verify that each new employee is legally eligible to work in the United States. Irs 1040ez form online Both you and the employee must complete the U. Irs 1040ez form online S. Irs 1040ez form online Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. Irs 1040ez form online You can get the form from USCIS offices or from the USCIS website at www. Irs 1040ez form online uscis. Irs 1040ez form online gov. Irs 1040ez form online Call the USCIS at 1-800-375-5283 for more information about your responsibilities. Irs 1040ez form online Form W-4. Irs 1040ez form online   Each employee must fill out Form W-4, Employee's Withholding Allowance Certificate. Irs 1040ez form online You will use the filing status and withholding allowances shown on this form to figure the amount of income tax to withhold from your employee's wages. Irs 1040ez form online For more information, see Publication 15. Irs 1040ez form online Employees claiming more than 10 withholding allowances. Irs 1040ez form online   An employer of an employee who claims more than 10 withholding allowances for wages paid can use several methods of withholding. Irs 1040ez form online See section 16 of Publication 15. Irs 1040ez form online Form W-2 Wage Reporting After the calendar year is over, you must furnish copies of Form W-2, Wage and Tax Statement, to each employee to whom you paid wages during the year. Irs 1040ez form online You must also send copies to the Social Security Administration. Irs 1040ez form online See Information Returns, later, for more information on Form W-2. Irs 1040ez form online Excise Taxes This section describes the excise taxes you may have to pay and the forms you have to file if you do any of the following. Irs 1040ez form online Manufacture or sell certain products. Irs 1040ez form online Operate certain kinds of businesses. Irs 1040ez form online Use various kinds of equipment, facilities, or products. Irs 1040ez form online Receive payment for certain services. Irs 1040ez form online For more information on excise taxes, see Publication 510, Excise Taxes. Irs 1040ez form online Form 720. Irs 1040ez form online   The federal excise taxes reported on Form 720, Quarterly Federal Excise Tax Return, consist of several broad categories of taxes, including the following. Irs 1040ez form online Environmental taxes. Irs 1040ez form online Communications and air transportation taxes. Irs 1040ez form online Fuel taxes. Irs 1040ez form online Tax on the first retail sale of heavy trucks, trailers, and tractors. Irs 1040ez form online Manufacturers taxes on the sale or use of a variety of different articles. Irs 1040ez form online Form 2290. Irs 1040ez form online   There is a federal excise tax on certain trucks, truck tractors, and buses used on public highways. Irs 1040ez form online The tax applies to vehicles having a taxable gross weight of 55,000 pounds or more. Irs 1040ez form online Report the tax on Form 2290, Heavy Highway Vehicle Use Tax Return. Irs 1040ez form online For more information, see the instructions for Form 2290. Irs 1040ez form online Form 730. Irs 1040ez form online   If you are in the business of accepting wagers or conducting a wagering pool or lottery, you may be liable for the federal excise tax on wagering. Irs 1040ez form online Use Form 730, Monthly Tax Return for Wagers, to figure the tax on the wagers you receive. Irs 1040ez form online Form 11-C. Irs 1040ez form online   Use Form 11-C, Occupational Tax and Registration Return for Wagering, to register for any wagering activity and to pay the federal occupational tax on wagering. Irs 1040ez form online Depositing Taxes You generally have to deposit employment taxes, certain excise taxes, corporate income tax, and S corporation taxes before you file your return. Irs 1040ez form online Generally, taxpayers are required to deposit taxes through the Electronic Federal Tax Payment System (EFTPS). Irs 1040ez form online Any business that has a federal tax obligation and requests a new EIN will automatically be enrolled in EFTPS. Irs 1040ez form online Through the mail, the business will receive an EFTPS PIN package that contains instructions for activating its EFTPS enrollment. Irs 1040ez form online Information Returns If you make or receive payments in your business, you may have to report them to the IRS on information returns. Irs 1040ez form online The IRS compares the payments shown on the information returns with each person's income tax return to see if the payments were included in income. Irs 1040ez form online You must give a copy of each information return you are required to file to the recipient or payer. Irs 1040ez form online In addition to the forms described below, you may have to use other returns to report certain kinds of payments or transactions. Irs 1040ez form online For more details on information returns and when you have to file them, see the General Instructions for Certain Information Returns. Irs 1040ez form online Form 1099-MISC. Irs 1040ez form online   Use Form 1099-MISC, Miscellaneous Income, to report certain payments you make in your trade or business. Irs 1040ez form online These payments include the following items. Irs 1040ez form online Payments of $600 or more for services performed for your business by people not treated as your employees, such as subcontractors, attorneys, accountants, or directors. Irs 1040ez form online Rent payments of $600 or more, other than rents paid to real estate agents. Irs 1040ez form online Prizes and awards of $600 or more that are not for services, such as winnings on TV or radio shows. Irs 1040ez form online Royalty payments of $10 or more. Irs 1040ez form online Payments to certain crew members by operators of fishing boats. Irs 1040ez form online You also use Form 1099-MISC to report your sales of $5,000 or more of consumer goods to a person for resale anywhere other than in a permanent retail establishment. Irs 1040ez form online Form W-2. Irs 1040ez form online   You must file Form W-2, Wage and Tax Statement, to report payments to your employees, such as wages, tips, and other compensation, withheld income, social security, and Medicare taxes. Irs 1040ez form online For more information on what to report on Form W-2, see the Instructions for Forms W-2 and W-3. Irs 1040ez form online Form 8300. Irs 1040ez form online   You must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, if you receive more than $10,000 in cash in one transaction or two or more related business transactions. Irs 1040ez form online Cash includes U. Irs 1040ez form online S. Irs 1040ez form online and foreign coin and currency. Irs 1040ez form online It also includes certain monetary instruments such as cashier's and traveler's checks and money orders. Irs 1040ez form online For more information, see Publication 1544, Reporting Cash Payments of Over $10,000 (Received in a Trade or Business). Irs 1040ez form online Penalties The law provides penalties for not filing returns or paying taxes as required. Irs 1040ez form online Criminal penalties may be imposed for willful failure to file, tax evasion, or making a false statement. Irs 1040ez form online Failure to file tax returns. Irs 1040ez form online   If you do not file your tax return by the due date, you may have to pay a penalty. Irs 1040ez form online The penalty is based on the tax not paid by the due date. Irs 1040ez form online See your tax return instructions for more information about this penalty. Irs 1040ez form online Failure to pay tax. Irs 1040ez form online   If you do not pay your taxes by the due date, you will have to pay a penalty for each month, or part of a month, that your taxes are not paid. Irs 1040ez form online For more information, see your tax return instructions. Irs 1040ez form online Failure to withhold, deposit, or pay taxes. Irs 1040ez form online   If you do not withhold income, social security, or Medicare taxes from employees, or if you withhold taxes but do not deposit them or pay them to the IRS, you may be subject to a penalty of the unpaid tax, plus interest. Irs 1040ez form online You may also be subject to penalties if you deposit the taxes late. Irs 1040ez form online For more information, see Publication 15. Irs 1040ez form online Failure to follow information reporting requirements. Irs 1040ez form online   The following penalties apply if you are required to file information returns. Irs 1040ez form online For more information, see the General Instructions for Certain Information Returns. Irs 1040ez form online Failure to file information returns. Irs 1040ez form online A penalty applies if you do not file information returns by the due date, if you do not include all required information, or if you report incorrect information. Irs 1040ez form online Failure to furnish correct payee statements. Irs 1040ez form online A penalty applies if you do not furnish a required statement to a payee by the due date, if you do not include all required information, or if you report incorrect information. Irs 1040ez form online Waiver of penalty. Irs 1040ez form online   These penalties will not apply if you can show that the failures were due to reasonable cause and not willful neglect. Irs 1040ez form online   In addition, there is no penalty for failure to include all the required information, or for including incorrect information, on a de minimis number of information returns if you correct the errors by August 1 of the year the returns are due. Irs 1040ez form online (To be considered de minimis, the number of returns cannot exceed the greater of 10 or ½ of 1% of the total number of returns you are required to file for the year. Irs 1040ez form online ) Failure to supply taxpayer identification number. Irs 1040ez form online   If you do not include your taxpayer identification number (SSN or EIN) or the taxpayer identification number of another person where required on a return, statement, or other document, you may be subject to a penalty of $50 for each failure. Irs 1040ez form online You may also be subject to the $50 penalty if you do not give your taxpayer identification number to another person when it is required on a return, statement, or other document. Irs 1040ez form online Business Expenses You can deduct business expenses on your income tax return. Irs 1040ez form online These are the current operating costs of running your business. Irs 1040ez form online To be deductible, a business expense must be both ordinary and necessary. Irs 1040ez form online An ordinary expense is one that is common and accepted in your field of business, trade, or profession. Irs 1040ez form online A necessary expense is one that is helpful and appropriate for your business, trade, or profession. Irs 1040ez form online An expense does not have to be indispensable to be considered necessary. Irs 1040ez form online The following are brief explanations of some expenses that are of interest to people starting a business. Irs 1040ez form online There are many other expenses that you may be able to deduct. Irs 1040ez form online See your form instructions and Publication 535, Business Expenses. Irs 1040ez form online Business Start-Up Costs Business start-up costs are the expenses you incur before you actually begin business operations. Irs 1040ez form online Your business start-up costs will depend on the type of business you are starting. Irs 1040ez form online They may include costs for advertising, travel, surveys, and training. Irs 1040ez form online These costs are generally capital expenses. Irs 1040ez form online You usually recover costs for a particular asset (such as machinery or office equipment) through depreciation (discussed next). Irs 1040ez form online You can elect to deduct up to $5,000 of business start-up costs and $5,000 of organizational costs paid or incurred after October 22, 2004. Irs 1040ez form online The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000. Irs 1040ez form online Any remaining cost must be amortized. Irs 1040ez form online For more information about amortizing start-up and organizational costs, see chapter 7 in Publication 535. Irs 1040ez form online Depreciation If property you acquire to use in your business has a useful life that extends substantially beyond the year it is placed in service, you generally cannot deduct the entire cost as a business expense in the year you acquire it. Irs 1040ez form online You must spread the cost over more than one tax year and deduct part of it each year. Irs 1040ez form online This method of deducting the cost of business property is called depreciation. Irs 1040ez form online Business property you must depreciate includes the following items. Irs 1040ez form online Office furniture. Irs 1040ez form online Buildings. Irs 1040ez form online Machinery and equipment. Irs 1040ez form online You can choose to deduct a limited amount of the cost of certain depreciable property in the year you place the property in service. Irs 1040ez form online This deduction is known as the “section 179 deduction. Irs 1040ez form online ” For more information about depreciation and the section 179 deduction, see Publication 946, How To Depreciate Property. Irs 1040ez form online Depreciation must be taken in the year it is allowable. Irs 1040ez form online Allowable depreciation not taken in a prior year cannot be taken in the current year. Irs 1040ez form online If you do not deduct the correct depreciation, you may be able to make a correction by filing Form 1040X, Amended U. Irs 1040ez form online S. Irs 1040ez form online Individual Income Tax Return, or by changing your accounting method. Irs 1040ez form online For more information on how to correct depreciation deductions, see chapter 1 in Publication 946. Irs 1040ez form online Business Use of Your Home To deduct expenses related to the business use of part of your home, you must meet specific requirements. Irs 1040ez form online Even then, your deduction may be limited. Irs 1040ez form online To qualify to claim expenses for business use of your home, you must meet both the following tests. Irs 1040ez form online Your use of the business part of your home must be: Exclusive (however, see Exceptions to exclusive use, later), Regular, For your trade or business, AND The business part of your home must be one of the following: Your principal place of business (defined later), A place where you meet or deal with patients, clients, or customers in the normal course of your trade or business, or A separate structure (not attached to your home) you use in connection with your trade or business. Irs 1040ez form online Exclusive use. Irs 1040ez form online   To qualify under the exclusive use test, you must use a specific area of your home only for your trade or business. Irs 1040ez form online The area used for business can be a room or other separately identifiable space. Irs 1040ez form online The space does not need to be marked off by a permanent partition. Irs 1040ez form online   You do not meet the requirements of the exclusive use test if you use the area in question both for business and for personal purposes. Irs 1040ez form online Exceptions to exclusive use. Irs 1040ez form online   You do not have to meet the exclusive use test if either of the following applies. Irs 1040ez form online You use part of your home for the storage of inventory or product samples. Irs 1040ez form online You use part of your home as a daycare facility. Irs 1040ez form online For an explanation of these exceptions, see Publication 587, Business Use of Your Home (Including Use by Daycare Providers). Irs 1040ez form online Principal place of business. Irs 1040ez form online   Your home office will qualify as your principal place of business for deducting expenses for its use if you meet the following requirements. Irs 1040ez form online You use it exclusively and regularly for administrative or management activities of your trade or business. Irs 1040ez form online You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. Irs 1040ez form online   Alternatively, if you use your home exclusively and regularly for your business, but your home office does not qualify as your principal place of business based on the previous rules, you determine your principal place of business based on the following factors. Irs 1040ez form online The relative importance of the activities performed at each location. Irs 1040ez form online If the relative importance factor does not determine your principal place of business, the time spent at each location. Irs 1040ez form online    If, after considering your business locations, your home cannot be identified as your principal place of business, you cannot deduct home office expenses. Irs 1040ez form online However, for other ways to qualify to deduct home office expenses, see Publication 587. Irs 1040ez form online Which form do I file?   If you file Schedule C (Form 1040), use Form 8829, Expenses for Business Use of Your Home, to figure your deduction. Irs 1040ez form online If you file Schedule F (Form 1040) or you are a partner, you can use the worksheet in Publication 587. Irs 1040ez form online More information. Irs 1040ez form online   For more information about business use of your home, see Publication 587. Irs 1040ez form online Car and Truck Expenses If you use your car or truck in your business, you can deduct the costs of operating and maintaining it. Irs 1040ez form online You generally can deduct either your actual expenses or the standard mileage rate. Irs 1040ez form online Actual expenses. Irs 1040ez form online   If you deduct actual expenses, you can deduct the cost of the following items: Depreciation Lease payments Registration Garage rent Licenses Repairs Gas Oil Tires Insurance Parking fees Tolls   If you use your vehicle for both business and personal purposes, you must divide your expenses between business and personal use. Irs 1040ez form online You can divide your expenses based on the miles driven for each purpose. Irs 1040ez form online Example. Irs 1040ez form online You are the sole proprietor of a flower shop. Irs 1040ez form online You drove your van 20,000 miles during the year. Irs 1040ez form online 16,000 miles were for delivering flowers to customers and 4,000 miles were for personal use. Irs 1040ez form online You can claim only 80% (16,000 ÷ 20,000) of the cost of operating your van as a business expense. Irs 1040ez form online Standard mileage rate. Irs 1040ez form online   Instead of figuring actual expenses, you may be able to use the standard mileage rate to figure the deductible costs of operating your car, van, pickup, or panel truck for business purposes. Irs 1040ez form online You can use the standard mileage rate for a vehicle you own or lease. Irs 1040ez form online The standard mileage rate is a specified amount of money you can deduct for each business mile you drive. Irs 1040ez form online It is announced annually by the IRS. Irs 1040ez form online To figure your deduction, multiply your business miles by the standard mileage rate for the year. Irs 1040ez form online    Generally, if you use the standard mileage rate, you cannot deduct your actual expenses. Irs 1040ez form online However, you may be able to deduct business-related parking fees, tolls, interest on your car loan, and certain state and local taxes. Irs 1040ez form online Choosing the standard mileage rate. Irs 1040ez form online   If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. Irs 1040ez form online In later years, you can choose to use either the standard mileage rate or actual expenses. Irs 1040ez form online   If you use the standard mileage rate for a car you lease, you must choose to use it for the entire lease period (including renewals). Irs 1040ez form online Additional information. Irs 1040ez form online   For more information about the rules for claiming car and truck expenses, see Publication 463, Travel, Entertainment, Gift, and Car Expenses. Irs 1040ez form online Recordkeeping This part explains why you must keep records, what kinds of records you must keep, and how to keep them. Irs 1040ez form online It also explains how long you must keep your records for federal tax purposes. Irs 1040ez form online A sample recordkeeping system is illustrated at the end of this part. Irs 1040ez form online Why Keep Records? Everyone in business must keep records. Irs 1040ez form online Good records will help you do the following. Irs 1040ez form online Monitor the progress of your business. Irs 1040ez form online   You need good records to monitor the progress of your business. Irs 1040ez form online Records can show whether your business is improving, which items are selling, or what changes you need to make. Irs 1040ez form online Good records can increase the likelihood of business success. Irs 1040ez form online Prepare your financial statements. Irs 1040ez form online   You need good records to prepare accurate financial statements. Irs 1040ez form online These include income (profit and loss) statements and balance sheets. Irs 1040ez form online These statements can help you in dealing with your bank or creditors and help you manage your business. Irs 1040ez form online An income statement shows the income and expenses of the business for a given period of time. Irs 1040ez form online A balance sheet shows the assets, liabilities, and your equity in the business on a given date. Irs 1040ez form online Identify source of receipts. Irs 1040ez form online   You will receive money or property from many sources. Irs 1040ez form online Your records can identify the source of your receipts. Irs 1040ez form online You need this information to separate business from nonbusiness receipts and taxable from nontaxable income. Irs 1040ez form online Keep track of deductible expenses. Irs 1040ez form online   You may forget expenses when you prepare your tax return unless you record them when they occur. Irs 1040ez form online Prepare your tax returns. Irs 1040ez form online   You need good records to prepare your tax returns. Irs 1040ez form online These records must support the income, expenses, and credits you report. Irs 1040ez form online Generally, these are the same records you use to monitor your business and prepare your financial statements. Irs 1040ez form online Support items reported on tax returns. Irs 1040ez form online   You must keep your business records available at all times for inspection by the IRS. Irs 1040ez form online If the IRS examines any of your tax returns, you may be asked to explain the items reported. Irs 1040ez form online A complete set of records will speed up the examination. Irs 1040ez form online Kinds of Records To Keep Except in a few cases, the law does not require any specific kind of records. Irs 1040ez form online You can choose any recordkeeping system suited to your business that clearly shows your income and expenses. Irs 1040ez form online The business you are in affects the type of records you need to keep for federal tax purposes. Irs 1040ez form online You should set up your recordkeeping system using an accounting method that clearly shows your income for your tax year. Irs 1040ez form online See Accounting Method, earlier. Irs 1040ez form online If you are in more than one business, you should keep a complete and separate set of records for each business. Irs 1040ez form online A corporation should keep minutes of board of directors' meetings. Irs 1040ez form online Your recordkeeping system should include a summary of your business transactions. Irs 1040ez form online This summary is ordinarily made in your books (for example, accounting journals and ledgers). Irs 1040ez form online Your books must show your gross income, as well as your deductions and credits. Irs 1040ez form online For most small businesses, the business checkbook (discussed later) is the main source for entries in the business books. Irs 1040ez form online In addition, you must keep supporting documents, explained later. Irs 1040ez form online Electronic records. Irs 1040ez form online   All requirements that apply to hard copy books and records also apply to electronic storage systems that maintain tax books and records. Irs 1040ez form online When you replace hard copy books and records, you must maintain the electronic storage systems for as long as they are material to the administration of tax law. Irs 1040ez form online An electronic storage system is any system for preparing or keeping your records either by electronic imaging or by transfer to an electronic storage media. Irs 1040ez form online The electronic storage system must index, store, preserve, retrieve and reproduce the electronically stored books and records in legible format. Irs 1040ez form online All electronic storage systems must provide a complete and accurate record of your data that is accessible to the IRS. Irs 1040ez form online Electronic storage systems are also subject to the same controls and retention guidelines as those imposed on your original hard copy books and records. Irs 1040ez form online   The original hard copy books and records may be destroyed provided that the electronic storage system has been tested to establish that the hard copy books and records are being reproduced in compliance with IRS requirements for an electronic storage system and procedures are established to ensure continued compliance with all applicable rules and regulations. Irs 1040ez form online You still have the responsibility of retaining any other books and records that are required to be retained. Irs 1040ez form online   The IRS may test your electronic storage system, including the equipment used, indexing methodology, software and retrieval capabilities. Irs 1040ez form online This test is not considered an examination and the results must be shared with you. Irs 1040ez form online If your electronic storage system meets the requirements mentioned earlier, you will be in compliance. Irs 1040ez form online If not, you may be subject to penalties for non-compliance, unless you continue to maintain your original hard copy books and records in a manner that allows you and the IRS to determine your correct tax. Irs 1040ez form online For details on electronic storage system requirements, see Revenue Procedure 97-22, available in Internal Revenue Bulletin 1997-13. Irs 1040ez form online Supporting Documents Purchases, sales, payroll, and other transactions you have in your business generate supporting documents. Irs 1040ez form online Supporting documents include sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks. Irs 1040ez form online These documents contain information you need to record in your books. Irs 1040ez form online It is important to keep these documents because they support the entries in your books and on your tax return. Irs 1040ez form online Keep them in an orderly fashion and in a safe place. Irs 1040ez form online For instance, organize them by year and type of income or expense. Irs 1040ez form online Gross receipts. Irs 1040ez form online   Gross receipts are the income you receive from your business. Irs 1040ez form online You should keep supporting documents that show the amounts and sources of your gross receipts. Irs 1040ez form online Documents that show gross receipts include the following. Irs 1040ez form online Cash register tapes. Irs 1040ez form online Bank deposit slips. Irs 1040ez form online Receipt books. Irs 1040ez form online Invoices. Irs 1040ez form online Credit card charge slips. Irs 1040ez form online Forms 1099-MISC. Irs 1040ez form online Purchases. Irs 1040ez form online   Purchases are the items you buy and resell to customers. Irs 1040ez form online If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into finished products. Irs 1040ez form online Your supporting documents should show the amount paid and that the amount was for purchases. Irs 1040ez form online Documents for purchases include the following. Irs 1040ez form online Canceled checks. Irs 1040ez form online Cash register tape receipts. Irs 1040ez form online Credit card sales slips. Irs 1040ez form online Invoices. Irs 1040ez form online These records will help you determine the value of your inventory at the end of the year. Irs 1040ez form online See Publication 538 for information on methods for valuing inventory. Irs 1040ez form online Expenses. Irs 1040ez form online   Expenses are the costs you incur (other than purchases) to carry on your business. Irs 1040ez form online Your supporting documents should show the amount paid and that the amount was for a business expense. Irs 1040ez form online Documents for expenses include the following. Irs 1040ez form online Canceled checks. Irs 1040ez form online Cash register tapes. Irs 1040ez form online Account statements. Irs 1040ez form online Credit card sales slips. Irs 1040ez form online Invoices. Irs 1040ez form online Petty cash slips for small cash payments. Irs 1040ez form online    A petty cash fund allows you to make small payments without having to write checks for small amounts. Irs 1040ez form online Each time you make a payment from this fund, you should make out a petty cash slip and attach it to your receipt as proof of payment. Irs 1040ez form online Travel, transportation, entertainment, and gift expenses. Irs 1040ez form online   Specific recordkeeping rules apply to these expenses. Irs 1040ez form online For more information, see Publication 463. Irs 1040ez form online Employment taxes. Irs 1040ez form online   There are specific employment tax records you must keep. Irs 1040ez form online For a list, see Publication 15. Irs 1040ez form online Assets. Irs 1040ez form online   Assets are the property, such as machinery and furniture you own and use in your business. Irs 1040ez form online You must keep records to verify certain information about your business assets. Irs 1040ez form online You need records to figure the annual depreciation and the gain or loss when you sell the assets. Irs 1040ez form online Your records should show the following information. Irs 1040ez form online When and how you acquired the asset. Irs 1040ez form online Purchase price. Irs 1040ez form online Cost of any improvements. Irs 1040ez form online Section 179 deduction taken. Irs 1040ez form online Deductions taken for depreciation. Irs 1040ez form online Deductions taken for casualty losses, such as losses resulting from fires or storms. Irs 1040ez form online How you used the asset. Irs 1040ez form online When and how you disposed of the asset. Irs 1040ez form online Selling price. Irs 1040ez form online Expenses of sale. Irs 1040ez form online   The following documents may show this information. Irs 1040ez form online Purchase and sales invoices. Irs 1040ez form online Real estate closing statements. Irs 1040ez form online Canceled checks. Irs 1040ez form online What if I don't have a canceled check?   If you do not have a canceled check, you may be able to prove payment with certain financial account statements prepared by financial institutions. Irs 1040ez form online These include account statements prepared for the financial institution by a third party. Irs 1040ez form online These account statements must be highly legible. Irs 1040ez form online The following table lists acceptable account statements. Irs 1040ez form online  IF payment is by. Irs 1040ez form online . Irs 1040ez form online . Irs 1040ez form online THEN the statement must show the. Irs 1040ez form online . Irs 1040ez form online . Irs 1040ez form online Check Check number. Irs 1040ez form online Amount. Irs 1040ez form online Payee's name. Irs 1040ez form online Date the check amount was posted to the account by the financial institution. Irs 1040ez form online Electronic funds transfer Amount transferred. Irs 1040ez form online Payee's name. Irs 1040ez form online Date the transfer was posted to the account by the financial institution. Irs 1040ez form online Credit card Amount charged. Irs 1040ez form online Payee's name. Irs 1040ez form online Transaction date. Irs 1040ez form online    Proof of payment of an amount, by itself, does not establish you are entitled to a tax deduction. Irs 1040ez form online You should also keep other documents, such as credit card sales slips and invoices, to show that you also incurred the cost. Irs 1040ez form online Recording Business Transactions A good recordkeeping system includes a summary of your business transactions. Irs 1040ez form online (Your business transactions are shown on the supporting documents just discussed. Irs 1040ez form online ) Business transactions are ordinarily summarized in books called journals and ledgers. Irs 1040ez form online You can buy them at your local stationery or office supply store. Irs 1040ez form online A journal is a book where you record each business transaction shown on your supporting documents. Irs 1040ez form online You may have to keep separate journals for transactions that occur frequently. Irs 1040ez form online A ledger is a book that contains the totals from all of your journals. Irs 1040ez form online It is organized into different accounts. Irs 1040ez form online Whether you keep journals and ledgers and how you keep them depends on the type of business you are in. Irs 1040ez form online For example, a recordkeeping system for a small business might include the following items. Irs 1040ez form online Business checkbook. Irs 1040ez form online Daily summary of cash receipts. Irs 1040ez form online Monthly summary of cash receipts. Irs 1040ez form online Check disbursements journal. Irs 1040ez form online Depreciation worksheet. Irs 1040ez form online Employee compensation record. Irs 1040ez form online The business checkbook is explained next. Irs 1040ez form online The other items are illustrated later under Sample Record System. Irs 1040ez form online The system you use to record business transactions will be more effective if you follow good recordkeeping practices. Irs 1040ez form online For example, record expenses when they occur, and identify the source of recorded receipts. Irs 1040ez form online Generally, it is best to record transactions on a daily basis. Irs 1040ez form online Business checkbook. Irs 1040ez form online   One of the first things you should do when you start a business is open a business checking account. Irs 1040ez form online You should keep your business account separate from your personal checking account. Irs 1040ez form online   The business checkbook is your basic source of information for recording your business expenses. Irs 1040ez form online You should deposit all daily receipts in your business checking account. Irs 1040ez form online You should check your account for errors by reconciling it. Irs 1040ez form online See Reconciling the checking account, later. Irs 1040ez form online   Consider using a checkbook that allows enough space to identify the source of deposits as business income, personal funds, or loans. Irs 1040ez form online You should also note on the deposit slip the source of the deposit and keep copies of all slips. Irs 1040ez form online   You should make all payments by check to document business expenses. Irs 1040ez form online Write checks payable to yourself only when making withdrawals from your business for personal use. Irs 1040ez form online Avoid writing checks payable to cash. Irs 1040ez form online If you must write a check for cash to pay a business expense, include the receipt for the cash payment in your records. Irs 1040ez form online If you cannot get a receipt for a cash payment, you should make an adequate explanation in your records at the time of payment. Irs 1040ez form online    Use the business account for business purposes only. Irs 1040ez form online Indicate the source of deposits and the type of expense in the checkbook. Irs 1040ez form online Reconciling the checking account. Irs 1040ez form online   When you receive your bank statement, make sure the statement, your checkbook, and your books agree. Irs 1040ez form online The statement balance may not agree with the balance in your checkbook and books if the statement: Includes bank charges you did not enter in your books and subtract from your checkbook balance, or Does not include deposits made after the statement date or checks that did not clear your account before the statement date. Irs 1040ez form online   By reconciling your checking account, you will: Verify how much money you have in the account, Make sure that your checkbook and books reflect all bank charges and the correct balance in the checking account, and Correct any errors in your bank statement, checkbook, and books. Irs 1040ez form online    You should reconcile your checking account each month. Irs 1040ez form online     Before you reconcile your monthly bank statement, check your own figures. Irs 1040ez form online Begin with the balance shown in your checkbook at the end of the previous month. Irs 1040ez form online To this balance, add the total cash deposited during the month and subtract the total cash disbursements. Irs 1040ez form online   After checking your figures, the result should agree with your checkbook balance at the end of the month. Irs 1040ez form online If the result does not agree, you may have made an error in recording a check or deposit. Irs 1040ez form online You can find the error by doing the following. Irs 1040ez form online Adding the amounts on your check stubs and comparing that total with the total in the “amount of check” column in your check disbursements journal. Irs 1040ez form online If the totals do not agree, check the individual amounts to see if an error was made in your check stub record or in the related entry in your check disbursements journal. Irs 1040ez form online Adding the deposit amounts in your checkbook. Irs 1040ez form online Compare that total with the monthly total in your cash receipt book, if you have one. Irs 1040ez form online If the totals do not agree, check the individual amounts to find any errors. Irs 1040ez form online   If your checkbook and journal entries still disagree, then refigure the running balance in your checkbook to make sure additions and subtractions are correct. Irs 1040ez form online   When your checkbook balance agrees with the balance figured from the journal entries, you may begin reconciling your checkbook with the bank statement. Irs 1040ez form online Many banks print a reconciliation worksheet on the back of the statement. Irs 1040ez form online   To reconcile your account, follow these steps. Irs 1040ez form online Compare the deposits listed on the bank statement with the deposits shown in your checkbook. Irs 1040ez form online Note all differences in the dollar amounts. Irs 1040ez form online Compare each canceled check, including both check number and dollar amount, with the entry in your checkbook. Irs 1040ez form online Note all differences in the dollar amounts. Irs 1040ez form online Mark the check number in the checkbook as having cleared the bank. Irs 1040ez form online After accounting for all checks returned by the bank, those not marked in your checkbook are your outstanding checks. Irs 1040ez form online Prepare a bank reconciliation. Irs 1040ez form online One is illustrated later under Sample Record System. Irs 1040ez form online Update your checkbook and journals for items shown on the reconciliation as not recorded (such as service charges) or recorded incorrectly. Irs 1040ez form online At this point, the adjusted bank statement balance should equal your adjusted checkbook balance. Irs 1040ez form online If you still have differences, check the previous steps to find the errors. Irs 1040ez form online   Table 3. Irs 1040ez form online Period of Limitations IF you. Irs 1040ez form online . Irs 1040ez form online . Irs 1040ez form online   THEN the period is. Irs 1040ez form online . Irs 1040ez form online . Irs 1040ez form online 1. Irs 1040ez form online Owe additional tax and situations (2), (3), and (4), below, do not apply to you   3 years 2. Irs 1040ez form online Do not report income that you should report and it is more than 25% of the gross income shown on the return   6 years 3. Irs 1040ez form online File a fraudulent return   Not limited 4. Irs 1040ez form online Do not file a return   Not limited 5. Irs 1040ez form online File a claim for credit or refund after you filed your return   Later of: 3 years or  2 years after tax   was paid 6. Irs 1040ez form online File a claim for a loss from worthless securities or a bad debt deduction   7 years Bookkeeping System You must decide whether to use a single-entry or a double-entry bookkeeping system. Irs 1040ez form online The single-entry system of bookkeeping is the simplest to maintain, but it may not be suitable for everyone. Irs 1040ez form online You may find the double-entry system better because it has built-in checks and balances to assure accuracy and control. Irs 1040ez form online Single-entry. Irs 1040ez form online   A single-entry system is based on the income statement (profit or loss statement). Irs 1040ez form online It can be a simple and practical system if you are starting a small business. Irs 1040ez form online The system records the flow of income and expenses through the use of: A daily summary of cash receipts, and Monthly summaries of cash receipts and disbursements. Irs 1040ez form online Double-entry. Irs 1040ez form online   A double-entry bookkeeping system uses journals and ledgers. Irs 1040ez form online Transactions are first entered in a journal and then posted to ledger accounts. Irs 1040ez form online These accounts show income, expenses, assets (property a business owns), liabilities (debts of a business), and net worth (excess of assets over liabilities). Irs 1040ez form online You close income and expense accounts at the end of each tax year. Irs 1040ez form online You keep asset, liability, and net worth accounts open on a permanent basis. Irs 1040ez form online   In the double-entry system, each account has a left side for debits and a right side for credits. Irs 1040ez form online It is self-balancing because you record every transaction as a debit entry in one account and as a credit entry in another. Irs 1040ez form online   Under this system, the total debits must equal the total credits after you post the journal entries to the ledger accounts. Irs 1040ez form online If the amounts do not balance, you have made an error and you must find and correct it. Irs 1040ez form online   An example of a journal entry exhibiting a payment of rent in October is shown next. Irs 1040ez form online General Journal Date Description of Entry Debit  Credit Oct. Irs 1040ez form online 5 Rent expense 780. Irs 1040ez form online 00     Cash   780. Irs 1040ez form online 00                 Computerized System There are computer software packages you can use for recordkeeping. Irs 1040ez form online They can be purchased in many retail stores. Irs 1040ez form online These packages are very helpful and relatively easy to use; they require very little knowledge of bookkeeping and accounting. Irs 1040ez form online If you use a computerized system, you must be able to produce sufficient legible records to support and verify entries made on your return and determine your correct tax liability. Irs 1040ez form online To meet this qualification, the machine-sensible records must reconcile with your books and return. Irs 1040ez form online These records must provide enough detail to identify the underlying source documents. Irs 1040ez form online You must also keep all machine-sensible records and a complete description of the computerized portion of your recordkeeping system. Irs 1040ez form online This documentation must be sufficiently detailed to show all of the following items. Irs 1040ez form online Functions being performed as the data flows through the system. Irs 1040ez form online Controls used to ensure accurate and reliable processing. Irs 1040ez form online Controls used to prevent the unauthorized addition, alteration, or deletion of retained records. Irs 1040ez form online Charts of accounts and detailed account descriptions. Irs 1040ez form online See Revenue Procedure 98-25 in Cumulative Bulletin 1998-1 for more information. Irs 1040ez form online How Long To Keep Records You must keep your records as long as they may be needed for the administration of any provision of the Internal Revenue Code. Irs 1040ez form online Generally, this means you must keep records that support an item of income or deduction on a return until the period of limitations for that return runs out. Irs 1040ez form online The period of limitations is the period of time in which you can amend your return to claim a credit or refund, or the IRS can assess additional tax. Irs 1040ez form online Table 3 contains the periods of limitations that apply to income tax returns. Irs 1040ez form online Unless otherwise stated, the years refer to the period after the return was filed. Irs 1040ez form online Returns filed before the due date are treated as filed on the due date. Irs 1040ez form online Keep copies of your filed tax returns. Irs 1040ez form online They help in preparing future tax returns and making computations if you file an amended return. Irs 1040ez form online Employment taxes. Irs 1040ez form online   If you have employees, you must keep all employment tax records for at least 4 years after the date the tax becomes due or is paid, whichever is later. Irs 1040ez form online For more information about recordkeeping for employment taxes, see Publication 15. Irs 1040ez form online Assets. Irs 1040ez form online   Keep records relating to property until the period of limitations expires for the year in which you dispose of the property in a taxable disposition. Irs 1040ez form online You must keep these records to figure any depreciation, amortization, or depletion deduction, and to figure your basis for computing gain or loss when you sell or otherwise dispose of the property. Irs 1040ez form online   Generally, if you received property in a nontaxable exchange, your basis in that property is the same as the basis of the property you gave up, increased by any money you paid. Irs 1040ez form online You must keep the records on the old property, as well as on the new property, until the period of limitations expires for the year in which you dispose of the new property in a taxable disposition. Irs 1040ez form online Records for nontax purposes. Irs 1040ez form online   When your records are no longer needed for tax purposes, do not discard them until you check to see if you have to keep them longer for other purposes. Irs 1040ez form online For example, your insurance company or creditors may require you to keep them longer than the IRS does. Irs 1040ez form online Sample Record System This example illustrates a single-entry system used by Henry Brown, who is the sole proprietor of a small automobile body shop. Irs 1040ez form online Henry uses part-time help, has no inventory of items held for sale, and uses the cash method of accounting. Irs 1040ez form online These sample records should not be viewed as a recommendation of how to keep your records. Irs 1040ez form online They are intended only to show how one business keeps its records. Irs 1040ez form online 1. Irs 1040ez form online Daily Summary of Cash Receipts This summary is a record of cash sales for the day. Irs 1040ez form online It accounts for cash at the end of the day over the amount in the Change and Petty Cash Fund at the beginning of the day. Irs 1040ez form online Henry takes the cash sales entry from his cash register tape. Irs 1040ez form online If he had no cash register, he would simply total his cash sale slips and any other cash received that day. Irs 1040ez form online He carries the total receipts shown in this summary for January 3 ($267. Irs 1040ez form online 80), including cash sales ($263. Irs 1040ez form online 60) and sales tax ($4. Irs 1040ez form online 20), to the Monthly Summary of Cash Receipts. Irs 1040ez form online Petty cash fund. Irs 1040ez form online   Henry uses a petty cash fund to make small payments without having to write checks for small amounts. Irs 1040ez form online Each time he makes a payment from this fund, he makes out a petty cash slip and attaches it to his receipt as proof of payment. Irs 1040ez form online He sets up a fixed amount ($50) in his petty cash fund. Irs 1040ez form online The total of the unspent petty cash and the amounts on the petty cash slips should equal the fixed amount of the fund. Irs 1040ez form online When the totals on the petty cash slips approach the fixed amount, he brings the cash in the fund back to the fixed amount by writing a check to “Petty Cash” for the total of the outstanding slips. Irs 1040ez form online (See the Check Disbursements Journal entry for check number 92. Irs 1040ez form online ) This restores the fund to its fixed amount of $50. Irs 1040ez form online He then summarizes the slips and enters them in the proper columns in the monthly check disbursements journal. Irs 1040ez form online 2. Irs 1040ez form online Monthly Summary of Cash Receipts This shows the income activity for the month. Irs 1040ez form online Henry carries the total monthly net sales shown in this summary for January ($4,865. Irs 1040ez form online 05) to his Annual Summary. Irs 1040ez form online To figure total monthly net sales, Henry reduces the total monthly receipts by the sales tax imposed on his customers and turned over to the state. Irs 1040ez form online He cannot take a deduction for sales tax turned over to the state because he only collected the tax. Irs 1040ez form online He does not include the tax in his income. Irs 1040ez form online 3. Irs 1040ez form online Check Disbursements Journal Henry enters checks drawn on the business checking account in the Check Disbursements Journal each day. Irs 1040ez form online All checks are prenumbered and each check number is listed and accounted for in the column provided in the journal. Irs 1040ez form online Frequent expenses have their own headings across the sheet. Irs 1040ez form online He enters in a separate column expenses that require comparatively numerous or large payments each month, such as materials, gross payroll, and rent. Irs 1040ez form online Under the General Accounts column, he enters small expenses that normally have only one or two monthly payments, such as licenses and postage. Irs 1040ez form online Henry does not pay personal or nonbusiness expenses by checks drawn on the business account. Irs 1040ez form online If he did, he would record them in the journal, even though he could not deduct them as business expenses. Irs 1040ez form online Henry carries the January total of expenses for materials ($1,083. Irs 1040ez form online 50) to the Annual Summary. Irs 1040ez form online Similarly, he enters the monthly total of expenses for telephone, truck/auto, etc. Irs 1040ez form online , in the appropriate columns of that summary. Irs 1040ez form online 4. Irs 1040ez form online Employee Compensation Record This record shows the following information. Irs 1040ez form online The number of hours Henry's employee worked in a pay period. Irs 1040ez form online The employee's total pay for the period. Irs 1040ez form online The deductions Henry withheld in figuring the employee's net pay. Irs 1040ez form online The monthly gross payroll. Irs 1040ez form online Henry carries the January gross payroll ($520) to the Annual Summary. Irs 1040ez form online 5. Irs 1040ez form online Annual Summary This annual summary of monthly cash receipts and expense totals provides the final amounts to enter on Henry's tax return. Irs 1040ez form online He figures the cash receipts total from the total of monthly cash receipts shown in the Monthly Summary of Cash Receipts. Irs 1040ez form online He figures the expense totals from the totals of monthly expense items shown in the Check Disbursements Journal. Irs 1040ez form online As in the journal, he keeps each major expense in a separate column. Irs 1040ez form online Henry carries the cash receipts total shown in the annual summary ($47,440. Irs 1040ez form online 9