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Business
Choose a Path
Common Types of Business Entities
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Sole Proprietorship: Easiest to form, owned by one person, but offers no personal liability protection (owner is personally responsible for debts).
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Partnership: Two or more owners; taxes typically pass through to partners, but partners share liability.
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Limited Liability Company (LLC): Combines liability protection (like a corporation) with pass-through taxation (like a partnership), a popular hybrid structure.
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Corporation (C-Corp): A separate legal entity from its owners (shareholders); offers strong liability protection but faces "double taxation" (profits taxed at corporate level and again when distributed as dividends).
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S Corporation (S-Corp): A special tax election for corporations that allows profits and losses to be passed through to owners' personal income without being subject to corporate tax rates.
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Limited Liability Partnership (LLP): Similar to a general partnership but offers some liability protection, often used by professionals like lawyers or accountants.
Key Considerations When Choosing
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Liability: How much personal risk are you willing to take? (LLCs and Corporations offer more protection).
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Taxation: Do you want profits taxed at the individual level (pass-through) or the corporate level?.
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Formation & Formalities: Ease of setup and ongoing compliance requirements.
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Management & Ownership: How many owners, and how will decisions be
What are my self-employed tax obligations?
As a self-employed individual, generally you are required to file an annual income tax return and pay estimated taxes quarterly.
Self-employed individuals generally must pay self-employment (SE) tax as well as income tax. SE tax is a Social Security and Medicare tax primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. In general, the wording "self-employment tax" only refers to Social Security and Medicare taxes and not any other tax (like income tax).
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Before you can determine if you are subject to self-employment tax and income tax, you must figure any net profit or net loss from your business. You do this by subtracting your business expenses from your business income. If your expenses are less than your income, the difference is net profit and becomes part of your income on page 1 of Form 1040 or 1040-SR. If your expenses are more than your income, the difference is a net loss. You usually can deduct your loss from gross income on page 1 of Form 1040 or 1040-SR. But in some situations your loss is limited. See Publication 334, Tax Guide for Small Business (For Individuals Who Use Schedule C), for more information.
You have to file an income tax return if your net earnings from self-employment were $400 or more. If your net earnings from self-employment were less than $400, you still have to file an income tax return if you meet any other filing requirement listed in the Form 1040 and 1040-SR instructions PDF.
How do I make my quarterly payments?
As a self-employed individual, estimated tax is the method used to pay Social Security, Medicare, and income taxes; this is because you do not have an employer withholding these taxes for you. Form 1040-ES, Estimated Tax for Individuals PDF, is used to figure these taxes.
Form 1040-ES contains a worksheet that is similar to Form 1040 or 1040-SR. You will need your prior year’s annual income tax return in order to fill out Form 1040-ES. Use the worksheet found in Form 1040-ES PDF to find out if you are required to pay estimated
taxes quarterly.
Form 1040-ES PDF also contains blank vouchers you can use to mail your estimated tax payments. Other payment options, including pay by phone and online methods, can be found at IRS.gov/payments. If this is your first year being self-employed, you will need to estimate the amount of income you expect to earn for the year. If you estimated your annual earnings too high, simply complete another Form 1040-ES worksheet to refigure your estimated tax for the next quarter. If you estimated your annual earnings too low, again complete another
Form 1040-ES worksheet to recalculate your estimated taxes for the next quarter. See the estimated taxes page for more information. The self-employment tax page has more information on Social Security and Medicare taxes.
How do I file my annual return?
To file your annual income tax return, you will need to use Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship), to report any income or loss from a business you operated or profession you practiced as a sole proprietor, or gig work performed. Schedule C
instructions PDF may be helpful in filling out this form.
In order to report your Social Security and Medicare taxes, you must file Schedule SE (Form 1040 or 1040-SR ), Self-Employment Tax PDF. Use the income or loss calculated on Schedule C to calculate the amount of Social Security and Medicare taxes you should have paid during
the year. The instructions for Schedule SE PDF may be helpful in filing out the form.
Am I required to file an information return?
If you made a payment as a small business or self-employed (individual), you are most likely required to file an information return to the IRS. In some situations, if you received a payment as a small business or self-employed (individual), you may be required to file an information
return to the IRS.
The four primary types of business structures in the U.S. are Sole Proprietorship, Partnership, Limited Liability Company (LLC), and Corporation, each affecting liability, taxation, and management; Sole Proprietorships offer simplicity with personal risk, Partnerships share profits/losses but also liability, LLCs provide liability protection with tax flexibility, and Corporations offer strong liability shielding but involve more complexity and regulations, with S Corporations being a common tax election for smaller corporate structures
Here's a breakdown of each:
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Description: Owned by one person, with no legal distinction between the owner and the business.
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Liability: Owner has unlimited personal liability for business debts.
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Taxation: Profits and losses are reported on the owner's personal tax return (pass-through).
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Description: Two or more individuals share ownership, profits, and losses.
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Liability: General partners usually have personal liability for business debts.
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Taxation: Profits/losses pass through to partners' personal returns.
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Limited Liability Company (LLC):
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Description: A hybrid structure offering personal liability protection like a corporation but with tax flexibility.
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Liability: Owners (members) are generally not personally liable for business debts.
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Taxation: Can choose to be taxed as a sole proprietorship, partnership, or corporation.
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Description: A complex legal entity separate from its owners (shareholders).
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Liability: Offers the strongest personal liability protection for owners.
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Taxation: Can be a C Corp (double taxation) or an S Corp (pass-through taxation, with specific rules).
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CP177 Notice
CP297 NoticeWhat this notice is about
We are notifying you of our intent to levy certain assets for unpaid taxes. You have the right to a Collection Due Process hearing.
What you need to do-
Read the notice carefully -- it explains our actions.
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Pay what you owe.
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Request a payment plan if you can't pay the full amount you owe.
You may want to-
Learn how to request a payment plan.
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Learn how to submit an offer in compromise.
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Fill out and send us a Form 2848, Power of Attorney and Declaration of Representative PDF, to allow someone (such as an accountant) to contact us on your behalf.
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Frequently asked questions
What should I do if I disagree with the notice?
Request a Collection Due Process hearing on Form 12153, Request for a Collection Due Process or Equivalent Hearing PDF.
Why should I request a Collection Due Process hearing?
You can appeal the intent to levy and other disagreements you have at a Collection Due Process hearing.
What happens if I can't pay what I owe?
You can request a payment plan if you can't pay the full amount you owe. Call us at the toll-free number on the top right corner of your notice to talk about payment options.-
U.S. labor laws provide fundamental protections for workers, covering wages & hours (FLSA), safety (OSHA), and anti-discrimination (EEOC laws), along with rights for unionization (NLRA), ensuring minimum pay, overtime, safe environments, and fair treatment regardless of race, gender, age, or disability, with federal rules often supplemented by stricter state laws. Key acts include the FLSA (minimum wage, overtime, child labor), OSH Act (workplace safety), NLRA (union rights), and ADA (disability rights).
Key Federal Labor Laws & Agencies
Fair Labor Standards Act (FLSA):
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Governs minimum wage, overtime (1.5x pay over 40 hrs/wk), and child labor standards, enforced by the Wage and Hour Division.
Occupational Safety and Health Act (OSH Act):
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Requires employers to provide a safe workplace, enforced by OSHA.
National Labor Relations Act (NLRA):
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Protects workers' rights to organize, bargain collectively, and engage in union activities.
Equal Employment Opportunity Commission (EEOC) Laws:
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Title VII, ADEA, ADA, Equal Pay Act prohibit discrimination based on race, sex, age (40+), disability, religion, national origin, and genetic info, and mandate reasonable accommodations.
Family and Medical Leave Act (FMLA):
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Allows eligible employees of covered employers to take up to 12 weeks of unpaid, job-protected leave for specific family and medical reasons.
What Laws Cover (and Don't Cover)
Covered:
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Fair pay, safe conditions, freedom from discrimination/harassment, right to organize, protection for leave.
Not Federally Required:
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Paid vacation, holidays, sick leave, severance, or a reason for termination (unless discriminatory/retaliatory), though some states mandate paid leave.
State Laws
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Many states have their own laws that must be followed if they offer greater protections or higher minimum wages than federal law.
State How to Get Help Laws
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Report safety issues to OSHA.
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Report discrimination to the EEOC.
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Contact the Wage and Hour Division for pay issues.
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Essential Bookkeeping Tips
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Separate Finances: Open a dedicated business bank account and credit card immediately to simplify expense tracking and tax preparation.
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Track Cash Flow Weekly: Monitor incoming and outgoing money weekly to avoid shortages and ensure you can cover expenses.
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Save and Digitize Receipts: Keep records of all expenses, using apps to scan and store digital copies for audit trails and tax deductions.
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Automate Invoicing: Send invoices immediately upon service delivery and set up automated reminders for overdue payments.
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Reconcile Monthly: Match bank statements with your accounting records every month to identify discrepancies early.
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Budget for Taxes: Set aside a percentage of income in a separate account for quarterly or annual tax payments.
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Review Financial Statements: Analyze Profit & Loss and Balance Sheet reports monthly to monitor business performance and growth.
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Hire a Professional: As the business grows, consult with a bookkeeper or accountant to ensure accuracy and compliance.
Key Tax and Compliance Tips
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Keep Records Securely: Maintain accurate, organized records for at least 3-7 years for potential audits.
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Understand Employee Status: Properly classify workers as employees or independent contractors (1099) to avoid penalties.
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Stay Updated on Deadlines: Use calendar reminders to never miss tax, payroll, or reporting deadlines.
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Business Resources
Research & Technology
Retirement plans
The advantages of a retirement plan are numerous. There are economic, business and tax advantages for your business, for your employees and for you. A retirement plan may give you an important competitive edge in attracting and keeping the best employees - and help you plan for your own retirement years.