IRS Publication 583 — Starting a Business and Keeping Records
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“Self-Employment Tax Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for them- selves. Y our payments of SE tax contribute to your cover- age under the social security system. Social security cov- erage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medi- care) benefits.”
The most common forms of business are the sole proprietorship, partnership, and corporation. When beginning a business, you must decide which form of business to use. Table 1. What New Business Owners Need To Know About Federal Taxes (Note: This table is intended to help you, as a new business owner, learn what you need to know about your federal tax responsibilities. To use it, ask yourself each question in the left column, then see the related discussion in the right column.)
What must I know? Where to find the answer... Which form of business will I use? See Determining Which Type of Business to Use. Will I need an employer identification number (EIN)? See Getting a Taxpayer Identification Number. Do I have to start my tax year in January, or may I start it in any other month?
See Designating a Tax Year.
What method can I use to account for my income and expenses?
See Choosing an Accounting Method.
What kinds of federal taxes will I have to pay? How should I pay my taxes?
See Business Taxes.
What must I do if I have employees? See Employment Taxes. Which forms must I file? See Table 2 and Information Returns. Are there penalties if I do not pay my taxes or file my returns? See Penalties. What business expenses can I deduct on my federal income tax return?
See Deducting Business Expenses.
What records must I keep? How long must I keep them? See Recordkeeping. 2 Publication 583 (12-2024)
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