Self-Employed and Business Federal Taxes

There are a number of forms required when you are self-employed or own your own business.

Federal is trying to have all payments come to them through Electronic Federal Tax Payment System (EFTPS). Some payments still can be sent through the mail, but it is being discouraged.

Income Taxes
First and foremost, there are the standard income taxes. This will be either a Schedule C attachment to your regular return, or if you are incorporated then you will file Form 1120 or Form 1120S for the business.
Estimated Taxes
If your income taxes are $1000 or more per year, you will need to file estimated taxes every three months with the Form 1040-ES. For corporations, that will involve the 1120-W if you owe $500 or more per year. The 1120-W must be paid electronically through the EFTPS.
Estimated taxes are due on:
  • The 15th day of the 4th month of your fiscal year.
  • The 15th day of the 6th month of your fiscal year.
  • The 15th day of the 9th month of your fiscal year.
  • The 15th day of the 1st month after the end of your fiscal year.
Most people have their fiscal year match the calendar year, so the due dates are typically April 15th, June 15th, September 15th, and January 15th of the following year.
Self-Employment Taxes
You will be expected to pay self-employment taxes if you earn $400 or more either working for yourself or if you receive a 1099-MISC. Self-employment taxes take the place of your standard social security and Medicare taxes that would be taken out of your paycheck if you were receiving regular W2 wages. Self-Employment Taxes can be filed quarterly with your Estimated Taxes or when you file your annual income tax return with Schedule C and Schedule SE.
Excise Tax
Certain businesses may be liable to pay a Federal excise tax depending on the type of business operated.
  • Form 720 covers a broad range of excise taxes such as communications and air transportation, fuel, and retail sale of heavy machinery.
  • Form 2290 is for certain trucks, truck tractors, and buses used on public highways that have a taxable gross weight of 55,000 lbs or more.
  • Form 730 deals with wagering pools and lotteries. Form 11-C is used to register any wagering activity and pay the Federal occupational tax on wagering.
If you have employees...
Withholding Taxes
Federal: Generally, all employees must have Federal taxes withheld from their paychecks.
Social Security and Medicare: Generally, all employes must withhold taxes for social security and Medicare. Half of what is due is paid by the employee and the other half is paid by the employer.
Withholding taxes are reported with the Form 941 Employer's Quarterly Federal Tax Return, due quarterly on April 30th, July 31st, October 31st, and January 31st.
Unemployment Taxes
The Federal Unemployment Tax Act (FUTA) is not withheld from employee wages and are paid by the employer. Unemployment is reported with the Form 940 Employer's Annual Federal Unemployment (FUTA) Tax Return, and is due on January 31st every year.