Business Tax Services

BUSINESS INFORMATION 

- Here's a business tax checklist for Sole Proprietors and 1065 Partnerships (partnerships that file Form 1065 with the IRS):

Sole Proprietor Tax Checklist

A sole proprietor is an individual who owns and operates a business by themselves, reporting income and expenses on their personal tax return.

1. Business Income Documentation

• Sales Receipts: Keep records of all income received (cash, checks, credit card payments, etc.).
• Bank Statements: Provide business-related bank statements showing deposits.
• Invoices/Contracts: All invoices for products or services sold.

2. Business Expense Documentation

• Receipts for Purchases: All receipts for materials, supplies, or other items purchased for the business.
• Utility Bills: Include phone, internet, and electricity bills if used for business purposes.
• Rent/Lease Payments: Documents showing rent or lease payments for business property.
• Mileage Log: If using a personal vehicle for business, keep a detailed log of miles driven and business purposes.
• Home Office Expenses: If claiming a home office deduction, keep records of the square footage of your home, business space, and related expenses like utilities, insurance, and repairs.
• Meals and Entertainment: Document business-related meals and entertainment expenses (50% deduction).

3. Employee or Contractor Information (if applicable)

• W-2 Forms: For any employees (showing wages paid and tax withheld).
• 1099 Forms: For independent contractors paid $600 or more.
• Payroll Records: If you have employees, bring payroll records, tax filings, and any employee benefits provided.

4. Tax Documents

• Form 1040 (U.S. Individual Income Tax Return): The main tax return for individuals.
• Schedule C (Profit or Loss from Business): Report business income and expenses.
• Schedule SE (Self-Employment Tax): Calculate self-employment taxes (Social Security and Medicare).
• Form 4562 (Depreciation and Amortization): If you have assets to depreciate (e.g., machinery, equipment, vehicles).
• Form 8889 (Health Savings Account): If you have an HSA.

5. Miscellaneous

• Previous Year’s Tax Return: To compare with last year’s tax situation and carry over relevant deductions or credits.
• Retirement Contributions: Any contributions to retirement plans like a SEP IRA, SIMPLE IRA, or Solo 401(k).
• Insurance: Proof of business insurance (if applicable).
• Licenses/Permits: If the business requires specific licenses or permits, provide documentation.

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1065 Partnership Tax Checklist

A 1065 partnership is a business entity with two or more owners (partners) that files a partnership tax return. The business itself does not pay income tax, but each partner reports their share of income on their individual returns.

1. Partnership Income Documentation

• Sales Receipts: Keep records of all income the partnership receives.
• Bank Statements: Statements for the partnership’s business bank account.
• Invoices/Contracts: Record of all invoices, contracts, and sales transactions.
• K-1 Forms: Schedule K-1 (Form 1065) is issued to each partner, reporting each partner’s share of income, deductions, and credits.

2. Business Expense Documentation

• Receipts for Purchases: All receipts for supplies, equipment, and materials purchased.
• Utility Bills: Phone, internet, and utilities for the business location.
• Rent/Lease Payments: Documentation showing rent or lease payments for business property.
• Vehicle Logs: Keep a detailed log of miles driven for business purposes.
• Business Insurance: Provide documentation of any insurance policies related to the business.

3. Partner-specific Documents

• W-2 Forms for Partners (if applicable): If any partner is an employee, include their W-2s.
• Partnership Agreement: The partnership agreement outlines each partner’s share of profits and losses and operational details.
• Contributions and Withdrawals: Any documentation of contributions or withdrawals made by each partner during the year.

4. Tax Forms

• Form 1065 (U.S. Return of Partnership Income): The tax return the partnership files to report business income, deductions, and credits.
• Schedule K-1 (Partner’s Share of Income, Deductions, Credits): Issued to each partner, this form reports their share of partnership earnings or losses.
• Form 4562 (Depreciation and Amortization): If the partnership has depreciable assets (e.g., equipment, vehicles, property).
• Form 1065 Schedule B (Questions related to the partnership’s tax treatment).
• Form 8889 (Health Savings Account): If applicable.

5. Other Documents

• State Tax Filings: Provide any state-level business tax filings.
• Retirement Plan Contributions: Contributions made to retirement plans (e.g., SEP IRAs, 401(k) plans) on behalf of partners.
• Loan Documents: If the partnership has taken out loans, provide documentation for the loan terms and balances.

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Additional Notes:

• Self-Employment Taxes: Sole proprietors and partners both must pay self-employment taxes (Social Security and Medicare) on their income.
• Estimated Tax Payments: Both sole proprietors and partnerships might need to make quarterly estimated tax payments. Keep a record of these payments.
• Deductions: For both entities, maximize eligible deductions to lower taxable income. These include business expenses, home office deductions, vehicle expenses, and retirement contributions.
• State Taxes: Be sure to account for any applicable state taxes (such as sales tax, franchise tax, or income tax).

Always consult with a tax professional or accountant to ensure all requirements are met and that you're taking advantage of available tax breaks.

Business Return      $550.00