2016 Tax Guide: Part 1 – Personal & Business Tax Returns

Whether you’re an individual with a full-time W-2 job, a freelancer who earns 1099 income through independent contractor work, or a small business owner, you’re likely on the hook for filing at least one federal income tax return each year. In addition to these IRS tax forms, you may be required to file state and local tax returns depending on where you live or do business.

Here is an overview of the most common federal income tax returns for both individuals and those who earn income through contract work or a business.

Personal Tax Returns

Form 1040: U.S. Individual Income Tax Return

All individual taxpayers must report their annual income from the previous year on Form 1040 and file it with the IRS by April 15, unless they file for an extension. This is the basic federal income tax return.

Form 1040A: U.S. Individual Income Tax Return

This federal tax form is a shorter version of the more common Form 1040. Form 1040A is limited to taxpayers who earn $100,000 or less in income each year, and a taxpayer must claim the standard deduction to file this return. Form 1040A is due by April 15.

Form 1040EZ: U.S. Income Tax Return for Single and Joint Filers with No Dependents

The Form 1040EZ is a simplified version of Form 1040, containing only 6 sections to complete. This tax return can only be filed by those who earn $100,000 or less in annual income, claim the standard deduction, and do not claim dependents. It is due by April 15 like other personal income tax returns.

Form 1040X: Amended U.S. Individual Tax Return

This form must be submitted to the IRS if corrections need to be made on a personal income tax return that has been filed. Therefore, it is called an amended return.

In general, Form 1040X has to be filed within 3 years of when the original return was submitted – or within 2 years following the date on which any tax payment for that year’s originally filed return was made – whichever date comes later.

Business Tax Returns

Form 1065: U.S. Return of Partnership Income

The Form 1065 must be filed by general business partnerships to report any business income they earn.

Let’s say you and your childhood friend open a sushi restaurant together in Florida, but you hold off on setting up an LLC or S corp for the business. You must report your restaurant income on this federal tax return. Form 1065 is due to the IRS by April 15 for business partnerships operating on a calendar year.
Form 1120: U.S. Corporation Income Tax Return

This IRS federal income tax return must be filed by owners of C corporations in order to report business income earned at the corporate level.

For example, if you run a beauty salon or taxi company under C corp status, you must file Form 1120 with the IRS. The return is due March 15 if your corporation is operating on a standard calendar year. You must report all income earned at the corporate level from the previous tax year.

Form 1120S: U.S. Income Tax Return for an S Corporation

S corporation owners, such as those who own marketing agencies or business IT firms, are required to file Form 1120S for reporting business income. This federal tax return has to be submitted by March 15 for S corporations that operate on a calendar year.

Also, remember that S corporations are considered pass-through entities. Therefore, you must report S corporation income on Form 1040 as well.

Form 1040-ES: Estimated Tax for Individuals

For those who earn 1099 contract income or operate an LLC or corporate entity, you’re likely on the hook for quarterly estimated tax payments. Use Form 1040-ES to make these payments to the IRS throughout the year. The traditional deadlines for estimated taxes fall on January 15, April 15, June 15, and September 15.

Form 990: Return of Organization Exempt From Income Tax

Even though tax-exempt non-profit organizations are not required to pay business taxes on income – or contributions, in this case – they generate, there is an IRS tax form for them to submit. This is known as Form 990.

This IRS tax form is considered an information return, meaning it informs the IRS of your non-profit’s financial activities to ensure you are properly handling your contributions. Form 990 must be submitted by May 15 each year for non-profits that run on a calendar year.

An Important Tax Form for Independent Contractors/Sole Proprietors

Form 1099-MISC: Miscellaneous Income Tax Return

The Form 1099-MISC tax return is used for reporting 1099 income earned by independent contractors and sole proprietors. This 1099 contract income is considered separate income from any earned wages or salaries through which an employer has already withheld taxes.

For instance, if you earn income through marketing consulting work, teaching students English at the library, or working as an Uber driver, but you have not established a formal corporation or LLC, you must report your earnings listed on Form 1099-MISC on your personal return before filing it with the IRS. Your employer or client should provide you with Form 1099-MISC.

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