Business Tax Services and Information
The IRS has many publications containing information about the federal tax laws that apply to businesses.
Publication 334, Tax Guide for Small Business, is a good place to start to learn more about sole proprietors and statutory employees. Publication 583, Starting a Business and Keeping Records, covers basic tax information for those who are starting a business. Look in section Tax Publications for other materials that can explain your business tax responsibilities. For information on electronically filing and paying your business taxes, go to the IRS Web site at www.irs.gov and click on IRS e-file.
Filing and Paying your Business Taxes Electronically
The IRS e-file for Business is a vast and growing set of electronic services from IRS designed for busy taxpayers. Our e-file for Business products offer various filing options via phone, PC software or internet and save time, improve accuracy, reduce paperwork and acknowledge receipt of your return.
The IRS is offering electronic filing services to filers of Information Returns (Form 1099, 1098 etc.), Employment Tax Returns (Forms 940 and 941), and Partnership Returns (Form 1065) as you can read below for more detail. If you would like to find an IRS approved provider for filing your business return or information on our partner´s page for discount services or promotions a company may offer, visit www.irs.gov and click on IRS e-file.
File Form 941 by Telephone
Employers nationwide have the opportunity to file Form 941, Employer´s Quarterly Federal Tax Return, using a Touch-Tone telephone, toll-free telephone number, and simple instructions. Businesses that meet certain qualifications are invited to participate in the paperless, 941TeleFile program. Eligible filers will receive a special 941TeleFile Tax Record and instructions with their Form 941 tax package.
If you receive the purple tax package in the mail with your traditional Form 941 and meet the qualifications in the instructions, you can use 941TeleFile. It´s easy and free. File your 941 in three easy steps:
- complete the 941TeleFile Tax Record
- with a Touch-Tone telephone, call the toll-free TeleFile number provided in the 941TeleFile tax package
- keep the 941TeleFile Tax Record as part of your permanent business records
The 941TeleFile system automatically calculates your tax liability and any overpayment or balance due during the call. It also gives you a confirmation number as proof of filing your return. The call takes only about 10 minutes. The system is available 24 hours a day, 7 days a week. And, there is nothing to mail to the IRS.
File 1042-S, 1098, 1099, 5498, 8027,W-2G and QWF (Information Returns) using a modem
An information return is the tax document used to report certain types of payments made by financial institutions and others who make payments as a part of their trade or busi-ness as required by Internal Revenue Code Regulations. Information returns are filed electronically using a modem and asynchronous communications through the FIRE (Filing Information Returns Electronically) system. Typically, modems for desktop computers of all types are capable of asynchronous communications.
Any filer of Information Returns may participate. However, any person including corporations, partnership, employers, estates and trust, who files 250 or more Information Returns of any Forms 1042-S, 1098, 1099, 5498, 8027, W-2G, and QWF for any calendar year must file their Information Returns electronically or by magnetic media. Beginning in calendar year 2003 for Tax Year 2002, 9-track magnetic tape will no long be an acceptable method for submitting Information Returns to IRS/MCC.
To participate you are required to submit Form 4419, Application for Filing Information Returns Magnetically/Electronically, to request authorization to file Information Returns with IRS/MCC. Upon approval, a five-character alpha/numeric Transmitter Control Code (TCC) will be assigned. Form 4419 should be submitted to IRS/MCC at least 30 days before the due date of the returns for current year processing. Send your completed Form 4419 to Internal Revenue Service Martinsburg Computing Center, Information Reporting Program 230 Murall Drive Kearneysville, WV 25430. For more information you may contact the IRS, Martinsburg Computing Center´s call site toll free at 1-866-455-7438. The site is available Monday through Friday, 8:30 a.m. to 4:30 p.m. EST. Telecommunications Device for the Deaf (TDD) can be reached at (304) 267-3367.
File Form 940 & Form 941 Using a Reporting Agent
The 940 e-file and 941 e-file programs allow the electronic filing of Form 940, Employer´s Annual Federal Unemployment (FUTA) Tax Return and Form 941, Employer´s Quarterly Federal Tax Return. The returns are transmitted nationwide via dial-up phone lines and menu-driven software directly to the IRS where they are processed at the Tennessee Computing Center (TCC) or the Austin Service Center (AUSC). An electronic acknowledgment is returned within 48 hours of receipt of the return. 940 e-file accepts only timely filed current year returns and 941 e-file accepts both timely filed returns, and late filed returns for the current quarter and for the four preceding quarters.
Large payroll processing companies, bulk-filer reporting agents, and/or large businesses capable of developing their own software are ideally suited to participate in the 940 e-file and/or 941 e-file program. Small businesses or reporting agents may also participate by developing their own software or by purchasing off the shelf software. With the appropriate software, almost any 940 and 941 filer can transmit their return.
To file using the IRS 940 e-file and/or 941 e-file program an applicant should obtain a copy of the following:
- Publication 1911, Instructions for Preparing and Submitting Form 8655, Reporting Agent Authorization
- Form 8655, Reporting Agent Authorization
- Publication 3062, Requirements of the Electronic Filing Program for
- Reporting of Form 941, Employer's Quarterly Federal Tax Return
- Publication 3715, Technical Specifications Guide for the Electronic Filing of Form 940, Employer's Federal Unemployment (FUTA) Tax Return
You can order these items free of charge through an IRS Area Distribution Center by calling the IRS at 1-800-829-3676 or visit the IRS Web site
www.irs.gov. Additional information on how to participate in 940 e-file and/or 941 e-file can be obtained by contacting the IRS Electronic Filing Help Desk at TCC Help Desk at 901-546-2690, ext. 7519 or the AUSC Help Desk at 512-460-4069.
File Form 940 & 941 Using a Personal Computer
Businesses that have a computer, modem and Web-based Internet access can transmit tax return information through a third party transmitter. The third party transmitter will batch, and then electronically forward the return to the Austin Service Center. The programs (940 On-Line & 941 On-Line) automatically conducts security checks, sends acknowledgments, and formats records to be processed by current IRS computer systems.
Business filers are responsible for obtaining a personal identification number (PIN) to be used as an electronic signature. You may request a PIN through a Letter of Application (LOA) electronically or through the mail. The electronic LOA is included in the software and can be electronically transmitted to the Austin Service Center via the third party transmitter. To request a PIN through the mail please submit a letter with your business information to: Internal Revenue Service, Austin Service Center, P.O. Box 1231, Stop 6380 AUSC Austin, TX 78767 Attn: ELF Unit Stop 6380 AUSC.
File Form 1065,"U.S. Return of Partnership Income"
IRS now accepts Forms 1065, U. S. Return of Partnership Income electronically. The return can be submitted by the business filer or through an approved third party software developer, preparer or transmitter. Section 1224 of the Taxpayer Relief Act of 1997 requires partnerships with more than 100 partners to file their return electronically for taxable years ending on or after December 31, 2000. Mandatory filing of tax year 2000 returns actually began in February 2001. However, partnerships with 100 or less partners can voluntarily file their return electronically. Participants (software developers and transmitters) must complete a Form 9041, Application/Registration for Electronic/Magnetic Media Filing of Business Returns. Form 9041 should be filed at least 60 days before the end of the accounting period for which the entity files to ensure timely receipt and review of the application. Form 9041 should be mailed to Internal Revenue Service, Austin Submission Processing Center, Attn. e-file Unit - Stop 6380, P. O. Box 1231, Austin, Texas 78767. Additional information on how to participate in the 1065 e-file program can be obtained by contacting the Memphis Submission Processing Center, Electronic Filing Unit, at (901) 546-2690. For future assistance, please visit our web site at www.irs.gov and click on IRS e-file.
Electronic Federal Tax Payment System (EFTPS)
EFTPS is the easiest way to pay all your federal taxes. With EFTPS-Direct individuals and businesses can make tax payments using the Internet, Personal Computer (PC) software, or phone to input all tax payment information. If you prefer to use your PC, free EFTPS Windows-based software is available and is easy to install and use. On the date you indicate, you instruct EFTPS to move the funds from your account to the Treasury´s account. Funds will not move from your account until the date you indicate. No government agency has access to your account, and your tax records will be updated with the IRS. All three methods are interchangeable.
Use EFTPS-On-line to make a payment, cancel a payment, review your payment history, change bank account information and more through the Internet. EFTPS-On-Line is easy to navigate and is secure with both a (Personal Identification Number) PIN and Internet Password combination.
EFTPS offers you total convenience. If you choose to make your payments using EFTPS-Direct, you can do so 24 hours a day, 7 days a week. As an added convenience EFTPS offers payment scheduling. Businesses can schedule payments up to 120 days in advance of the tax due date, and individuals can schedule payments up to 365 days, and EFTPS will automatically make payments on the due date you indicate.
Remember that EFTPS allows you to select how you want to make your payments. You may choose, EFTPS-Direct or EFTPS-Through a Financial Institution. If you decide to make payments using a service offered by a financial institution, you will instruct them to electronically move funds from your account to the Treasury´s account. Please check with your financial institution first to learn if they offer this service, how much it costs and if you are eligible to use it. Not all financial institutions offer this service.
Tax practitioners, accountants and payroll companies are discovering the added benefits for using EFTPS. There are five easy ways to make payments for your business or clients.
EFTPS-On-LineUse the Internet to make payments for your business or clients. Registration is not required for practitioners, however taxpayers must be enrolled. Visit www.eftps.gov
EFTPS-PC SoftwareAvailable to taxpayers or providers who wish to make debit payments from a Windows-based PC. Registration is not required for practitioners, however taxpayers must be enrolled.
EFTPS-PhoneAvailable to tax-payers or providers who wish to make debit payments using the telephone.
EFTPS-Batch ProviderDesigned for payroll processors and others who wish to enroll their clients and submit batches of payments using Windows-based software.
EFTPS-Bulk ProviderDesigned for payroll processors who initiate frequent payments from and desire automated enrollment through an Electronic Data Interchange (EDI) compatible system.
Whether you use EFTPS-Direct or EFTPS-Through a Financial Institution, you are in control of initiating your tax payments. If you would like to enroll or need additional information call EFTPS Customer Service or visit us online at www.eftps.gov.
1-800-555-4477 or 1-800-945-8400
1-800-945-8600 or 1-800-244-4829 (Español)
1-800-945-8900 or 1-800-733-4829 (TTY/TDD)
Independent Contractor or Employee
For federal tax purposes, this is an important distinction. Worker classification affects how you pay your federal income tax, social security and Medicare taxes, and how you file your return. Classification affects your eligibility for employer and social security and Medicare benefits and your tax responsibilities.
A worker is either an independent contractor or an employee. The classification is determined by relevant facts that fall into three main categories: behavioral control; financial control; and relationship of the parties. In each case, it is very important to consider all the facts no single fact provides the answer. Publication 1779, Independent Contractor or Employee, has detailed information about these facts.
An independent contractor will usually maintain an office and staff, advertise, and have a financial investment risk. Independent contractors will generally file a Schedule C and may be able to deduct certain expenses that an employee would not.
Generally, an employee is controlled by an employer in ways that a true independent contractor is not. If the employer has the legal right to control the details of how the services are performed, the worker is generally an employee, not an independent contractor.
Those who should be classified as employees, but aren´t, may lose out on social security and Medicare benefits, workers´ compensation, unemployment benefits, and, in many cases, group insurance (including life and health), and retirement benefits.
If you are not sure whether you are an independent contractor or an employee, get Form SS-8, Determination of Employee Work Status for Purposes of Federal Employment Taxes and Income Tax Withholding.
Publication 1779, Independent Contractor or Employee, and Publication 15-A, Employer´s Supplemental Tax Guide, provide additional information on independent contractor or employee status. IRS publications and forms can be downloaded from the Internet at www.irs.gov. You can also order a free copy of IRS publications and forms when you call the IRS at 1-800-829-3676.
Office of Public Liaison and Small Business Affairs
As a national public liaison for small businesses, this office maintains daily contact and exchanges business tax information with IRS external stakeholders national organizations representing tax professionals, payroll processors, volunteers and social services, electronic commerce, state departments of revenue, small business organizations, and large corporate taxpayers. This office also works with the Small Business Administration and other government agencies to initiate and foster programs and actions to reduce small business burdens government-wide.
The Office of Public Liaison and Small Business Affairs provides one-stop´ service for sharing small business´ information. Some of these services include:
- working to establish partnering opportunities
- providing forums to discuss new ideas and feedback
- tracking issues and sharing information
- coordinating liaison meetings
- coordinating IRS participation at meetings and conferences
You can write to the IRS Office of Public Liaison and Small Business Affairs if you have suggestions regarding tax laws, regulations, or policy.
Internal Revenue Service
The Office of Public Liaison and
Small Business Affairs CL:PL
IR Room 7559
1111 Constitution Avenue, NW
Washington, DC 20224
This office does not handle small business owners´ individual tax problems. If a problem has not been resolved after repeated attempts through normal IRS channels, small business owners should contact their local IRS Taxpayer Advocate Service for assistance. See section in this booklet on Taxpayer Advocate Service (TAS) under Taxpayer Assistance Programs for more information.
Small Business/Self-Employed, Taxpayer Education and Communication (TEC)
TEC educates and informs small business and self-employed taxpayers and representatives regarding their tax obligations by developing educational products and services focused on customer needs and by providing top quality pre-filing services to help taxpayers understand and comply with the tax laws. The following tax publications and products are available for businesses and can be ordered free through the IRS by calling 1-800-829-3676.
Publication 334, Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ)
Publication 454, Your Business Tax Kit, contains various IRS business tax forms and publication that may be used to prepare and file business tax returns. Besides forms and publications, the kit includes information on quick and easy access to IRS tax help and forms.
Publication 583, Starting a Business and Keeping Records Publication 1518, Tax Calendar for Small BusinessesThis 12-month calendar is filled with helpful hints, general tax information and a listing of the most common tax filing dates. Each month highlights a new tax tip to help small businesses for the tax filing season during the year.
Publication 1853, Business Talk, tells of the new IRS and lists services and products available for small businesses.
Publication 3207, The Small Business Resource Guide CD 2001The CD contains all of the business tax forms, instructions, and publications needed by small business owners. In addition, the CD provides other information such as how to prepare a business plan, and finding financing your business.
Publication 3698-A, TEC Phone Number Listing is inserted in the Publication 3698 and lists all TEC territory phone numbers.
Publication 3699, A Virtual Tour, a brochure that highlights the Small Business Community Web Site.
Many IRS information products and services, including a listing of Small Business Workshops by state, are available on the IRS Web site at www.irs.gov.
SSA/IRS (Social Security Administration/Internal Revenue Service) Reporter (Newsletter)
If you are an employer and have not been receiving a copy of the SSA/IRS Reporter, tell your local IRS Communications Manager.
The SSA/IRS Reporter is a quarterly newsletter that keeps you up-to-date on changes to taxes and employee wage obligations. This newsletter, produced jointly by the Social Security Administration and the IRS, is mailed to approximately seven million employers along with each quarterly Form 941, Employer´s Quarterly Federal Tax Return, and instructions.
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