Structure of Business- Sole proprietor

[Batman]

A sole proprietor is someone who owns an unincorporated business by himself or herself. However, if you are the sole member of a domestic limited liability company (LLC), you are not a sole proprietor if you elect to treat the LLC as a corporation.

If you are a sole proprietor use the information in the chart below to help you determine some of the forms that you may be required to file.

IF you are liable for: THEN use Form:
Income Tax 1040 and Schedule C or C-EZ
Self-employment tax Schedule SE
Estimated tax 1040-ES
Social security and Medicare taxes and income tax withholding 941 or 944
8109 (to make deposits)

Providing information on social security and Medicare taxes and income tax withholding W-2to employee
W-2 and W-3 (to the Social Security Administration)

Federal unemployment (FUTA) tax 940
8109 (to make deposits)

[Batman]

A partnership is the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business.

A partnership must file an annual information return to report the income, deductions, gains, losses, etc., from its operations, but it does not pay income tax. Instead, it "passes through" any profits or losses to itspartners.Each partner includes his or her share of the partnership's income or loss on his or her tax return.
Partners are not employees and should not be issued a Form W-2. Thepartnership must furnish copies of Schedule K-1 (Form 1065) to the partners by the date Form 1065 is required to be filed, including extensions.

If you are a partnership or a partner (individual) in a partnership, use the information in the charts below to help you determine some of the forms that you may be required to file.

Partnership
If you are a partnership then you may be liable for Use Form Annual return of income 1065

Employment taxes:
Social security and Medicare taxes and income tax withholding
Federal unemployment (FUTA) tax Depositing employment taxes 941, 943 for farm employees 940 and or 8109

Individual Partners in a Partnership

If you are a partner (individual) in a partnership then you may be liable for... Use Form...
Income Tax 1040 and Schedule E
Self-employment tax 1040 and Schedule SE
Estimated tax 1040-ES

[Batman]

Corporations
In forming a corporation, prospective shareholders exchange money, property, or both, for the corporation's capital stock. A corporation generally takes the same deductions as a sole proprietorship to figure its taxable income. A corporation can also take special deductions.

The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. However, shareholders cannot deduct any loss of the corporation.
If you are a corporation or an S corporation use the information in the charts below to help you determine some of the forms that you may be required to file.

Corporation or S Corporation

If you are a corporation or an S corporation then you may be liable for... Use Form...
Income Tax 1120 or 1120-A (corporation)
1120S (S corporation)

Estimated tax 1120-W (corporation only) and 8109
Employment taxes:

Social security and Medicare taxes and income tax withholding
Federal unemployment (FUTA) tax
Depositing employment taxes 941, 943
or farm employees 940 8109

S Corporation Shareholders
If you are an S corporation shareholder then you may be liable for... Use Form...
Income Tax 1040 and Schedule E
Estimated tax 1040-ES

[Batman]

S Corporations

An eligible domestic corporation can avoid double taxation (once to the shareholders and again to the corporation) by electing to be treated as an S corporation. Generally, an S corporation is exempt from federal income tax other than tax on certain capital gains and passive income. 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 non separately stated income or loss.

If you are an S corporation use the information in the charts below to help you determine some of the forms that you may be required to file.

S Corporation

If you are an S corporation then you may be liable for use form
Income Tax 1120S (S corporation)

Estimated tax 1120-W (corporation only) and 8109
Employment taxes:

Social security and Medicare taxes and income tax withholding
Federal unemployment (FUTA) tax
Depositing employment taxes 941and or 943
for farm employees)file form 940 and or 8109

S Corporation Shareholders
If you are an S corporation
shareholder then you may be liable for use form
Income Tax 1040 and Schedule E
Estimated tax 1040-ES

[Batman]

Limited Liability Company (LLC)

A Limited Liability Company (LLC) is a relatively new business structure allowed by state statute.

LLCs are popular because, similar to a corporation, owners have limited personal liability for the debts and actions of the LLC. Other features of LLCs are more like a partnership, providing management flexibility and the benefit of pass-through taxation.

Owners of an LLC are called members. Since most states do not restrict ownership, members may include individuals, corporations, other LLCs and foreign entities. There is no maximum number of members. Most states also permit “single member” LLCs, those having only one owner.

A few types of businesses generally cannot be LLCs, such as banks and insurance companies. Check your state’s requirements and the federal tax regulations for further information. There are special rules for foreign LLCs.

[pranith]

Many types of businesses generally cannot be LLCs, such as banks and insurance companies. Check your state’s requirements and the federal tax regulations for further information. There are special rules for foreign LLCs Am I right?