I Will Help You with Your Tax Preparation
The first thing you need to know about your self-employment tax preparation is what kind of business structure you have. The options for self-employed people are sole proprietorships, LLCs, partnerships, S-corporations, and C-corporations. Knowing which you are, or choosing which you will be, is essential to know how exactly to do your taxes. For sole proprietors, all expenses and income for your business can be declared on your Schedule C form, and you will have to pay Social Security, Medicare, and other self-employment taxes. If you’re in business with a partner, or own part of an LLC along with other owners, you’ll generally need to file a partnership return. (In some cases, an LLC can file as an S-corporation). A partnership usually does not has to pay federal income tax, but will have to file an information return. Income form a partnership flows through to the returns of the individual partners. A C-corporation is its own tax-paying entity, and gets certain deductions that partnerships don’t get. The corporation is taxed on the recipient’s tax return, and at the corporate level. S-corporations are more like partnerships, because the income flows through your personal tax return. You should also get a tax ID number, and keep good records of your expenses.