Tax guides
Business tax under US federal and state rules.
First map sales, work, workers and property by state; file wherever that state's income or franchise tax rules require it, even without an office. Sole proprietors file and pay personally. Partnerships file entity returns while partners pay on shares. Corporations pay entity taxes; S corporations can also pass taxable income to shareholders. A sales-tax permit alone does not decide.
Self-employed · Partnerships · Corporations
A genuine business loss may reduce wages and other income on your individual return, including a spouse's wages on a joint return. First check basis, at-risk and passive loss rules, then the annual excess business loss limit. Unused losses may carry forward under different rules. A hobby or C corporation loss cannot offset your wages.
Individuals · Self-employed · Partnerships · Corporations
Favor assets for new basis: you report operations and file Form 8594 when required, though successor tax may follow. Stock gives share basis; the corporation keeps debts and files its return. A disregarded or wholly acquired partnership-taxed LLC follows assets; a continuing interest gets interest basis; a corporation-taxed LLC follows stock. Check liens and state clearance before paying.
Self-employed · Partnerships · Corporations
Identify who pays, rebuild basis and debt shares. A direct partnership or S corporation share sale taxes the seller; direct buyers cannot deduct the price. A partnership redemption can create distribution gain or ordinary income; an S corporation redemption can be a sale or distribution. Both issue K-1s. A partnership-taxed LLC reduced to one owner files a final Form 1065.
Partnerships · Corporations
Usually, yes if the LLC or corporation is registered or doing business in California. An inactive registered entity can still owe the annual $800 LLC tax or $800 corporation minimum tax. An out-of-state entity can owe it without registering if it does business in California. First-year and short-year exceptions may change the result.
Self-employed · Partnerships · Corporations
Check notice deadlines first, then confirm how the business was taxed in each missing year. Rebuild records from the oldest year forward, reconcile payroll, and file partnership or S corporation returns before owners prepare or correct returns using their Schedules K-1. Address state filings alongside federal ones. File even if the business cannot pay in full.
Self-employed · Partnerships · Corporations
Compare filed K-1s, owner copies, and returns. A centralized-rule partnership generally files an AAR, pays any imputed underpayment, and sends Forms 8986 for passed-through adjustments; partners use Form 8978 or pass adjustments. Elected-out partnerships amend Form 1065 and K-1s. An S corporation amends Form 1120-S and K-1s; shareholders pay tax due. C corporations amend Form 1120-X and pay tax due.
Partnerships · Corporations
A US corporation generally spreads software development performed in India or another foreign country over 15 years, starting at the tax year's midpoint. Qualifying US development is generally deductible when paid or incurred, unless the corporation elects to amortize it. First, separate costs by where each development task was performed.
Corporations
A Delaware corporation's notice can be high because the state initially uses its authorized shares, even when few shares were issued. A corporation with par value stock may lower the current bill by reporting issued shares and gross assets so Delaware can compare the assumed par value capital method. LLCs and partnerships pay a separate flat annual tax.
Corporations · Partnerships
A US C corporation pays federal income tax on its own taxable profit at 21% and generally files Form 1120 each year. Dividends paid from its earnings can then be taxed to shareholders, without a corporate deduction. Owner wages run through payroll; business losses stay with the corporation. Estimated payments and separate state filings may also apply.
Corporations
A domestic LLC's federal tax treatment depends on its owners and elections. By default, a one-owner LLC is disregarded for income tax and its owner reports the activity; an LLC with multiple owners is taxed as a partnership. An eligible LLC can elect C corporation or S corporation treatment. State taxes and filing duties can still apply separately.
Self-employed · Partnerships · Corporations
A partnership or multi-member LLC taxed as a partnership generally files Form 1065 but does not pay federal income tax on its profit. It gives each partner Schedule K-1, and each partner reports their share on their own return, even if no cash was distributed. Payments, losses, state taxes, and audit adjustments can change the result.
Partnerships
An S corporation usually passes its income, losses, deductions, and credits to shareholders instead of paying federal income tax on ordinary profit. Shareholders report their shares whether or not cash is distributed. The corporation files Form 1120-S and gives each shareholder a Schedule K-1. Distributions depend on stock basis; former C corporations and states can face additional taxes.
Corporations
A late partnership or S corporation return can trigger a monthly charge for every owner, even when no tax is due. A C corporation's federal filing and payment penalties generally depend on unpaid tax. A timely filing extension generally postpones the filing deadline, not the payment deadline. The IRS may remove qualifying penalties through automatic relief, small-partnership relief or reasonable cause.
Partnerships · Corporations
Online sellers report taxable profit, not just marketplace payouts or the amount on Form 1099-K. A business seller subtracts returns, the cost of goods sold and allowable selling expenses from sales, then may owe income and self-employment tax. Personal items sold at a loss have no taxable gain; warehouse inventory can also trigger state filing duties.
Individuals · Self-employed · Partnerships
A state pass-through entity tax election may help when the partnership or S corporation can deduct the tax federally and its owners receive usable state credits. Compare every owner's federal deduction, state credit and other-state taxes before electing. A higher personal SALT limit has reduced the benefit for some owners; deadlines and eligibility depend on the state.
Partnerships · Corporations
Price alone does not set the tax. For a C corporation, a stock sale generally taxes the shareholder once; an asset sale taxes the corporation and may tax shareholders again on a payout. For S corporations and partnerships, either structure usually creates one level of tax, but asset gains can be ordinary. Compare after-tax cash using each offer's terms.
Self-employed · Partnerships · Corporations
Texas LLCs and corporations are generally subject to franchise tax, even if federally disregarded. For the 2026 report, annualized total revenue at or below $2,650,000 generally means no tax report or payment, but a Public Information Report remains due. To fix forfeiture, file missing reports and pay balances. Secretary of State reinstatement also needs a tax clearance letter.
Self-employed · Partnerships · Corporations
A US citizen or resident who owns a foreign company may need Form 5471, even if the company pays no dividend. The filing category depends on control, share transactions, and ownership by other US persons. If the company is a controlled foreign corporation, some income may also enter the owner's US return before any cash is paid.
Individuals · Corporations
Your federal return follows your business's tax classification, not just its LLC label. A sole proprietor or disregarded single-member LLC generally reports business activity on the owner's return. A partnership files Form 1065, an S corporation files Form 1120-S, and a C corporation files Form 1120. No income does not automatically remove a filing duty, especially for corporations or state returns.
Self-employed · Partnerships · Corporations
Confirm how the business is taxed and when its first tax year ends. Reconcile income, expenses, owner transactions, and pre-opening costs; then prepare the applicable return and any owner schedules. Check payroll, information, and state filings separately. File by the deadline for that return, or request an extension and pay any tax due on time.
Self-employed · Partnerships · Corporations
Not sure which rules apply?