IRS Small Business Self-Employed Tax Center | ASL
IR-2023-93, April 28, 2023
WASHINGTON — As part of National Small Business Week, April 30 to May 6, the Internal Revenue Service is highlighting tax benefits and resources to help those looking to start a business.
National Small Business Week is an annual effort led by the Small Business Administration to recognize the hard work, ingenuity and dedication of America's small businesses and to celebrate their contributions to the economy. To support the special week, the IRS has a variety of resources available for small business owners to help them understand and meet their tax responsibilities. Next week, the IRS will be highlighting some of these resources, and @IRSnews also plans a special Twitter chat on Thursday.
When choosing to start a business, it's important to consider the following:
Most business owners will need an Employer Identification Number (EIN). It's a permanent number and can be used for most business needs, from opening bank accounts to filing a tax return by mail. Business owners can get their EIN immediately by applying online at IRS.gov at no cost.
Taxpayers must decide what form of business entity to establish when starting a business. This helps determine which income tax return form must be filed. The most common business structures are:
By law, everyone must pay taxes as they earn income. For small business owners and self-employed people, that usually means making quarterly estimated tax payments as their business earns or receives income during the year. The form of business being operated determines what taxes must be paid and how to pay them. The four general types of business taxes are:
In addition to helping with tax return preparation, maintaining well-organized records can also help small businesses prepare financial statements, identify sources of income, keep track of deductible expenses and monitor their progress, among other benefits. Taxpayers should plan to maintain their records for at least three years.
A "tax year" is an annual accounting period for reporting income and expenses. Small businesses must figure their taxable income based on a tax year and can choose between: