Filing Personal and Business Taxes Separately: A Small Business Guide

5 Min. Read

Filing Personal and Business Taxes Separately: A Small Business Guide

Filing Personal and Business Taxes Separately: A Small Business Guide
How you file your clientele taxes with the IRS depends on your business ’ second structure. Some structures, like corporations, must file their business taxes individually from their personal taxes. other structures, like sole proprietorships, must report their occupation income on their personal taxes .
Below we ’ ll look at how each type of small business must file their taxes.

In this article, we’ll cover:
NOTE: FreshBooks Support team members are not certified income tax or accounting professionals and cannot provide advice in these areas, outside of supporting questions about FreshBooks. If you need income tax advice please contact an accountant in your area .

Can I File My Personal and Business Taxes Separately?

You can only file your personal and clientele taxes individually if your company it is a pot, according to the IRS. A corporation is a business that ’ randomness seen as an entity separate from its owner ( s ) that pays its own tax. Corporations file their taxes using Form 1120 .
Limited indebtedness companies ( LLCs ) can besides choose to be treated as a corporation by the IRS, whether they have one or multiple owners. In that situation, they must besides file their taxes using Form 1120, which means the owners must file their personal and business taxes individually .
All early business structures must report their income or losses via the owner or owners ’ personal tax returns. We ’ ll look at each structure ’ s tax report obligations below .
Need more time to file your taxes ? Use tax form 4868 or Form 7004 to apply for an extension .

Sole Proprietorships

A sole proprietorship is an unincorporated occupation that has a individual owner. exclusive proprietors report their business income or losses on their personal tax recurrence by using Form 1040. They must besides file Schedule C ( Form 1040 ) to report the net income and loss from their business. Filing taxes as a sole owner is a fairly straightforward matter .


The IRS considers people freelance if they are sole proprietors ( see above ), an autonomous contractor or in commercial enterprise for yourself in any other way, even part-time .
The report rules are the like as with sole proprietors : report occupation profits and losses on your personal income tax hark back ( Form 1040 ) vitamin a well as Schedule C. You can ’ triiodothyronine file your business taxes individually from your personal taxes .


A partnership is a business owned by two or more people. These people contribution in the profits and losses of the commercial enterprise and contribute undertaking, skill, property or money. Partners report their partake of the business ‘s profits or losses on their personal income tax hark back ( Form 1040 ), according to the IRS .
The partnership must besides file an information reelect, Form 1065. But the business itself doesn ’ t give taxes based on this information return, the partners do via their personal tax render .

Limited Liability Companies (LLC)

LLCs are business structures that are regulated by each person submit. Owners of LLCs are called members and most states permit LLCs to entirely have one owner. LLCs with two or more members are classified as partnerships unless they elect to be treated as a pot. LLCs with one member is treated an an entity disregarded from its owner, unless it asks to be treated as a pot. If an LLC hasn ’ thymine elected to be treated as a pot, the profit or loss will be reported on the owners personal tax revert .
As we covered above, corporations can file their clientele taxes individually. Partnerships and dismiss entities must file their business taxes via their personal tax reelect ( Form 1040 ).

LLCs can ask to be treated as corporations, or otherwise change their condition, by filing form 8832 .
People also ask:

Can You File LLC Business Taxes with Personal Taxes?

Yes, you can file LLC commercial enterprise taxes with your personal taxes unless you ask for the LLC to be treated as a pot .
LLCs can ask the IRS to treat them as a corporation, partnership, or disregarded entity by filing Form 8832, if their nonpayment status is otherwise .

What Is the LLC Tax Rate for 2018?

The LLC tax rate for 2018 is 21 percentage for LLCs that have elected to be treated as corporations, according to Greenbush Financial Group .
That said, many LLCs are taxed as pass-through entities, not corporations, and they are not taxed this flat rate of 21 percentage .
pass-through entities are businesses where the profits or losses of a clientele are reported on the owner ( randomness ) personal income tax fall. This means that these owners are taxed at standard income tax rates .
The IRS has a list of the 2018 rates. For example, if you have taxable income of $ 38,701 to $ 82,500, your tax rate is $ 4,453.50 plus 22 percentage of the come over $ 38,700 .
That said, starting in 2018, many pass-through small commercial enterprise owners will lone be taxed on 80 percentage of their pass-through income .
This unblock on-line LLC tax calculator will help you calculate your 2018 taxes .

How to File Taxes for an LLC with No Income

How an LLC files its taxes when it had no income for that tax year depends on its commercial enterprise structure .
An LLC that is treated as a partnership by the IRS must inactive file an data return using Form 1065 evening if it made no income.

An LLC that is treated as a pot by the IRS must still file an income tax return using Form 1120, unless they are excuse under department 501. nontaxable organizations include charities and religious organizations, according to the IRS .
If an LLC is treated as a neglect entity by the IRS, they must however report their miss of income via Schedule C ( Form 1040 ) .

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