What Do I Need for Business Taxes: Forms, Deadlines, and Records

To file business taxes you need four things in hand: a taxpayer identification number (EIN or SSN), complete records of your income, receipts and logs proving every expense you want to deduct, and the correct federal tax form for your business structure. If you have employees or contractors, add payroll and 1099 records. If you own equipment, vehicles, or other long-lived property, add asset and depreciation files. What you need for business taxes is essentially a paper trail thorough enough that the IRS can trace every number on your return back to a document.

Missing pieces cost real money. The accuracy-related penalty under Section 6662 alone runs 20% of any underpayment tied to sloppy records.1Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty on Underpayments

Your Taxpayer ID and Business Identity

The IRS needs to know who is filing. Most businesses use an Employer Identification Number, a free nine-digit number issued by the IRS. Partnerships, corporations, multi-member LLCs, and any business with employees must have one. Sole proprietors with no employees can file using their Social Security Number, though many still get an EIN to keep their personal SSN off business paperwork.

Your return also needs your legal business name exactly as it appears on your formation documents or state registration, any trade name you operate under, and your registered business address. The IRS uses the address for correspondence and to route your return to the correct processing center.

Income Records

You owe tax on every dollar your business earns, whether or not a third party sends you a form for it. The IRS receives copies of the same 1099s you get, and its automated matching system flags mismatches, so what you report needs to reconcile with what platforms and clients reported about you.

  • Form 1099-NEC. Clients who paid you $2,000 or more for services during 2026 must send this form. The threshold rose from $600 for payments made after December 31, 2025. Income below the threshold is still taxable and still gets reported.2Internal Revenue Service. Form 1099 NEC and Independent Contractors
  • Form 1099-K. Payment apps and online marketplaces must report your transactions when the total exceeds $20,000 and you have more than 200 transactions in a year. Some platforms send the form below those thresholds.3Internal Revenue Service. Understanding Your Form 1099-K
  • Bank statements and sales logs. Monthly bank statements are your baseline for catching income that never generated a form. Reconcile them against invoices and deposit records.
  • Refunds and credits. Track returns and allowances separately. They reduce gross receipts, but only if you have documentation.

Interest from a business savings account, investment dividends, and other secondary income each need their own paper trail.

Expense Receipts and Logs

Every legitimate business expense reduces your taxable profit, but only if you can prove it. No receipt, no deduction. For each expense your records should show the amount, the date, who you paid, and the business purpose.

Keep documentation for rent, utilities, insurance, office supplies, software subscriptions, professional fees, and any other cost of doing business. Digital copies are fine as long as they are legible and organized.

Vehicle and Travel

Vehicle and travel deductions get extra scrutiny because they overlap with personal use. The IRS requires a written log showing the date, destination, business purpose, and miles driven for each trip.4Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses For travel, keep separate receipts for lodging, transportation, and meals. A single bundled round number is an audit flag. A running mileage log kept through the year is far easier than reconstructing one in March.

Home Office

If you use part of your home regularly and exclusively for business, you can deduct a portion of your housing costs. The simplified method lets you deduct $5 per square foot of dedicated workspace, up to 300 square feet, capped at $1,500.5Internal Revenue Service. Simplified Option for Home Office Deduction The regular method often produces a larger deduction but requires tracking actual mortgage interest or rent, utilities, insurance, and repairs, then allocating them by square footage. Either way, you need the exact dimensions of your workspace.

Cost of Goods Sold

If you sell physical products, calculate cost of goods sold separately from other expenses. That means tracking inventory value at the start of the year, materials and products purchased for resale during the year, labor tied directly to production, and inventory value at year-end. COGS is subtracted from gross revenue before other deductions apply, so weak inventory records directly inflate your tax bill.

Asset and Depreciation Files

Equipment, vehicles, furniture, and other property that lasts more than a year generally cannot be deducted in full in the purchase year. You spread the deduction over the asset’s useful life through depreciation, calculated under the Modified Accelerated Cost Recovery System.6Internal Revenue Service. Publication 946 (2024), How To Depreciate Property

For every business asset, keep records showing:

  • What you bought and when it went into business use
  • The purchase price and any improvement costs
  • The percentage of business versus personal use
  • Depreciation deductions claimed each year
  • How and when you eventually sold or disposed of it

These records need to stay in your files for as long as you own the asset and for several years after disposal, because the IRS uses them to verify past depreciation and calculate any gain or loss on the sale.7Internal Revenue Service. What Kind of Records Should I Keep – Section: Assets

The Section 179 deduction is the main exception to the spread-it-out rule. It lets you write off the full cost of qualifying equipment and software in the year you place it in service, up to an annual dollar limit adjusted for inflation.8Internal Revenue Service. Instructions for Form 4562 (2025) To claim it you need records showing when you acquired the property, who you bought it from, and when it went into service.

Payroll and Contractor Paperwork

If you have W-2 employees, keep records of total wages paid, federal income tax withheld, Social Security and Medicare taxes withheld, and each employee’s name, address, and Social Security Number. You report this on Form W-2, furnished to the employee and filed with the Social Security Administration.

For independent contractors, keep the legal name, address, taxpayer identification number, and total paid. For 2026 payments, you must issue Form 1099-NEC to any contractor paid $2,000 or more.2Internal Revenue Service. Form 1099 NEC and Independent Contractors Collect a W-9 from every contractor before you pay them. Chasing down taxpayer IDs in January is a headache that compounds every year you skip it.

The Right Federal Form for Your Structure

Your business structure determines which return you file. Filing the wrong form, or filing under the wrong entity classification, can delay processing for months.

  • Sole proprietors and single-member LLCs. Schedule C, filed with your personal Form 1040. Business income and expenses flow onto your individual return.9Internal Revenue Service. Instructions for Schedule C (Form 1040) (2025)
  • Partnerships and multi-member LLCs. Form 1065, an informational return. The entity pays no income tax; each partner gets a Schedule K-1 showing their share of the income to report on their personal return.10Internal Revenue Service. Instructions for Form 1065 (2025)
  • S corporations. Form 1120-S. Income passes through to shareholders on Schedule K-1 rather than being taxed at the entity level.11Internal Revenue Service. About Form 1120-S, U.S. Income Tax Return for an S Corporation
  • C corporations. Form 1120. The corporation pays income tax directly; shareholders pay again on dividends.

Single-member LLCs default to sole proprietorship treatment, and multi-member LLCs default to partnership treatment, unless you file Form 8832 to elect corporate treatment.12Internal Revenue Service. Instructions for Schedule C (Form 1040) (2025) – Section: General Instructions If you elected S corporation status for your LLC, file Form 1120-S.

Self-Employment Tax and Quarterly Payments

Sole proprietors, partners, and other self-employed people owe self-employment tax on net earnings on top of regular income tax. The rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare. You calculate and report it on Schedule SE, attached to your Form 1040.

The 15.3% rate applies to earnings up to the annual Social Security wage base, which is adjusted each year. Earnings above the cap still owe the 2.9% Medicare portion, and high earners pay an additional 0.9% Medicare surtax on self-employment income above $200,000 ($250,000 if married filing jointly). You can deduct half of your SE tax as an adjustment to income, which softens the blow, but the full amount is still due at filing. W-2 employees split these taxes with their employer; self-employed people pay both halves, which is why so many first-year filers owe more than they expected.

If you expect to owe $1,000 or more in federal tax when you file, the IRS generally requires quarterly estimated payments rather than one April lump.13Internal Revenue Service. Estimated Taxes Corporations trigger the requirement at $500. Individuals use Form 1040-ES; corporations use Form 1120-W. The four due dates for the 2026 tax year are April 15, 2026; June 15, 2026; September 15, 2026; and January 15, 2027.14Taxpayer Advocate Service. Making Estimated Payments

Most people avoid the underpayment penalty by paying at least 100% of last year’s tax liability (110% if adjusted gross income topped $150,000) spread across the four installments, or at least 90% of the current year’s tax.

Filing Deadlines for 2025 Returns

For 2025 returns filed in 2026, the deadlines for calendar-year businesses are:15Internal Revenue Service. Publication 509 (2026), Tax Calendars

  • March 16, 2026. Partnerships (Form 1065) and S corporations (Form 1120-S). The normal March 15 date falls on a Sunday.
  • April 15, 2026. Sole proprietors (Schedule C with Form 1040) and C corporations (Form 1120).

Need more time? Sole proprietors file Form 4868 for an automatic six-month extension. Partnerships, S corporations, and C corporations file Form 7004.16Internal Revenue Service. Instructions for Form 7004 An extension buys time to file, not time to pay. Estimate your liability and pay it by the original deadline or interest and penalties start running.

Penalties If You File or Pay Late

Two separate penalties run at the same time when you miss the deadline and owe money:

  • Failure to file. 5% of unpaid tax per month or partial month, capped at 25%.17Internal Revenue Service. Failure to Pay Penalty
  • Failure to pay. 0.5% of unpaid tax per month or partial month, also capped at 25%.

Filing on time and setting up a payment plan, even if you cannot pay in full, drops the failure-to-pay rate to 0.25% per month. On top of the timing penalties, the 20% accuracy-related penalty can apply to underpayments caused by negligence or a substantial understatement, which is where thorough records earn their keep.1Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty on Underpayments

How Long to Keep Everything

Three years is the floor, not the ceiling. The right retention period depends on the record and the situation:18Internal Revenue Service. How Long Should I Keep Records

  • 3 years. The standard, measured from the date you filed the return or its due date, whichever is later.
  • 4 years. Employment tax records, from the date the tax was due or paid, whichever is later.
  • 6 years. If you underreported income by more than 25%.
  • 7 years. If you claimed a deduction for worthless securities or bad debt.
  • Indefinitely. If you never filed a return or filed a fraudulent one.

Asset records need special attention. Keep purchase invoices, improvement receipts, and depreciation schedules for as long as you own the asset plus the applicable retention period after you sell or dispose of it. Many owners toss equipment receipts after three years and then cannot prove cost basis when they sell the equipment a decade later. Store digital copies in at least two places.