What Are the Types of Tax Returns for Businesses?

The types of business tax returns you file depend on how your business is organized. A sole proprietor reports business income on Schedule C attached to a personal Form 1040. A partnership files Form 1065. A C corporation files Form 1120. An S corporation files Form 1120-S. On top of that main income tax return, most businesses also file employment tax returns if they have employees, information returns for payments to contractors, and — in a narrow set of industries — excise tax returns.

Sole Proprietorships and Single-Member LLCs File Schedule C

If you run a business by yourself and haven’t incorporated, your business income goes on your personal tax return. You file Form 1040 and attach Schedule C, which reports the business’s revenue and deductible expenses to arrive at a net profit or loss.¹ A single-member LLC works the same way. The IRS treats it as a “disregarded entity,” meaning it doesn’t exist separately from you for tax purposes unless you elect corporate treatment.²

Your net business profit flows into your Form 1040 alongside any wages, interest, or other income, and you pay individual income tax at rates ranging from 10% to 37%.³ You also owe self-employment tax of 15.3% on your net earnings, split between 12.4% for Social Security and 2.9% for Medicare.⁴ The Social Security portion applies only to earnings up to $184,500 in 2026; the Medicare portion has no cap.⁵

Because no employer withholds taxes from your business income, you generally have to make quarterly estimated tax payments if you expect to owe at least $1,000 for the year after any withholding and refundable credits.⁶

Partnerships and Multi-Member LLCs File Form 1065

When two or more people own a business together without incorporating, the default federal classification is a partnership. The business files Form 1065 each year. This is an information return; the partnership itself doesn’t pay income tax.⁷ Form 1065 reports the entity’s total income, deductions, and credits so the IRS can cross-check what each owner reports on their own return.

Each partner receives a Schedule K-1 showing their share of the business’s income, losses, and deductions based on the partnership agreement.⁷ Partners transfer those figures to their personal returns and pay tax at individual rates. Like sole proprietors, partners owe self-employment tax on their distributive share of business earnings.

C Corporations File Form 1120

A C corporation is a separate legal entity that pays its own income tax. The business files Form 1120 to report annual income, deductions, and credits and to calculate what it owes.⁸ The federal corporate tax rate is a flat 21% of taxable income.⁹

The well-known downside of C corporation status is double taxation. The corporation pays tax on its profits at 21%, and when it distributes those after-tax profits as dividends, shareholders pay individual income tax on the dividends they receive. That two-layer hit is why many small businesses avoid C corporation status unless they have specific reasons for it, such as attracting venture capital or retaining earnings at the lower corporate rate.

C corporations must also make quarterly estimated tax payments. Corporations with at least $1 million in taxable income in any of the three preceding years face especially strict estimated payment rules and can’t rely on the prior year’s tax to calculate safe-harbor amounts.

S Corporations File Form 1120-S

An S corporation is not a different type of business entity. It’s a tax election. An eligible corporation or LLC files Form 2553 to elect S corporation status.¹⁰ Once approved, the business files Form 1120-S instead of Form 1120, and the income passes through to shareholders’ personal returns, avoiding the double taxation that hits C corporations.

Shareholders receive a Schedule K-1 showing their share of the corporation’s income, which they report on their individual returns. To qualify for and maintain S status, the business cannot have more than 100 shareholders, and all shareholders must be U.S. citizens, residents, or certain qualifying trusts.¹¹ Losing eligibility — by accidentally adding a 101st shareholder or bringing on a foreign investor, for example — triggers an involuntary conversion back to C corporation status.

Employment Tax Returns for Businesses With Workers

Any business with employees has filing obligations beyond the income tax return. Form 941, filed quarterly, reports the federal income tax withheld from employee paychecks plus both the employer and employee shares of Social Security and Medicare taxes.¹² Very small employers with $1,000 or less in annual payroll tax liability may be able to file Form 944 annually instead.

Form 940 is filed once a year to report federal unemployment (FUTA) tax, which funds the unemployment insurance system. Only the employer pays FUTA; it’s not deducted from employee wages.¹³

Employment tax obligations come with personal risk that most business taxes don’t. The money you withhold from employee paychecks is held in trust for the government. If you fail to turn it over, the IRS can assess a trust fund recovery penalty equal to 100% of the unpaid amount, and it applies personally to any individual responsible for the failure, even if the business is a corporation or LLC.¹⁴ Your corporate structure won’t protect you here.

Information Returns for Payments to Contractors

If your business pays independent contractors, you may need to file Form 1099-NEC to report those payments. Starting in 2026, the reporting threshold increased from $600 to $2,000, so you only file a 1099-NEC for contractors who received $2,000 or more during the year.¹⁵ Beginning in 2027, the $2,000 threshold adjusts annually for inflation. You still have to file a 1099-NEC regardless of the amount if you withheld federal income tax from the payment.

The same $2,000 threshold now applies to Form 1099-MISC, which covers other types of payments like rent and royalties.¹⁵ Both forms are due to the IRS and to the recipient by January 31 of the following year.

Excise Tax Returns for Certain Industries

Most small businesses never file an excise return. But if you manufacture, sell, or use certain products — including fuel, tobacco, alcohol, airline tickets, and heavy highway vehicles — you owe federal excise taxes reported on Form 720, filed quarterly.¹⁶ Beginning in 2026, remittance transfer providers also fall under Form 720 reporting.¹⁷

When Each Return Is Due

The deadline depends on which return you file. Partnerships (Form 1065) and S corporations (Form 1120-S) that follow the calendar year must file by March 15.¹⁸ C corporations (Form 1120) have until the 15th day of the fourth month after the tax year ends, which is April 15 for calendar-year filers.¹⁹ Sole proprietors file Schedule C with their personal return, also due April 15.

If you need more time, Form 7004 gives most business entities an automatic six-month extension to file.²⁰ Sole proprietors use Form 4868 instead, since their business return is part of their personal filing. An extension gives you more time to file, not more time to pay. If you owe tax, you still need to estimate and pay by the original deadline to avoid interest and penalties.

Quarterly Estimated Payment Dates

Business owners who expect to owe $1,000 or more for the year generally need to make quarterly estimated payments.⁶ For tax year 2026, the due dates are:

First quarter: April 15, 2026
Second quarter: June 15, 2026
Third quarter: September 15, 2026
Fourth quarter: January 15, 2027

You can skip the January payment if you file your return and pay in full by February 1, 2027.⁶ Corporations have their own estimated payment rules, which generally require payments if the corporation expects to owe $500 or more for the year.

What Happens if You File Late

Two separate penalties apply to most tax returns, and confusing them is common. The failure-to-file penalty is 5% of the unpaid tax for each month the return is late, up to a maximum of 25%.²¹ The failure-to-pay penalty is much smaller: 0.5% per month of the unpaid balance, also capped at 25%.²² If you can’t afford your full tax bill, file the return anyway. The filing penalty is ten times steeper than the payment penalty, and the IRS offers installment agreements for the balance.

Partnership and S corporation returns carry a different penalty structure because they’re information returns. Instead of a percentage of unpaid tax, the penalty is a flat dollar amount per owner per month. For Form 1065 returns due in 2025, the IRS charged $245 per partner for every month or partial month the return was overdue, up to 12 months.²¹ For S corporations filing in 2026, the amount is $255 per shareholder per month, also capped at 12 months.²³ Both figures adjust for inflation each year. A ten-shareholder S corporation that files six months late faces a penalty of $15,300, entirely separate from any tax owed by the individual shareholders.

1
Internal Revenue Service. About Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship)
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Internal Revenue Service. Single Member Limited Liability Companies
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Internal Revenue Service. Federal Income Tax Rates and Brackets
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Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
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Social Security Administration. Contribution and Benefit Base
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Internal Revenue Service. Estimated Tax for Individuals
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Internal Revenue Service. About Form 1065, U.S. Return of Partnership Income
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Internal Revenue Service. About Form 1120, U.S. Corporation Income Tax Return
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Office of the Law Revision Counsel. 26 USC 11 – Tax Imposed
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Internal Revenue Service. About Form 2553, Election by a Small Business Corporation
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Office of the Law Revision Counsel. 26 USC 1361 – S Corporation Defined
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Internal Revenue Service. About Form 941, Employer’s Quarterly Federal Tax Return
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Internal Revenue Service. Instructions for Form 940
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Office of the Law Revision Counsel. 26 USC 6672 – Failure to Collect and Pay Over Tax
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Internal Revenue Service. Publication 1099 (2026), General Instructions for Certain Information Returns
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Internal Revenue Service. Instructions for Form 720 – Quarterly Federal Excise Tax Return
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Internal Revenue Service. Excise Tax
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Internal Revenue Service. Starting or Ending a Business 3
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Internal Revenue Service. Publication 509 (2026), Tax Calendars
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Internal Revenue Service. About Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns
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Internal Revenue Service. Failure to File Penalty
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Internal Revenue Service. Failure to Pay Penalty
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Internal Revenue Service. Instructions for Form 1120-S