There are an average of 4.4 million businesses started in the U.S. every year. Maybe your business was one of them this year (congrats!) and this will be your first year filing business taxes. Or maybe your business has grown this year (great work!) causing you to need tax forms you’re not familiar with. Whatever this past year brought you, a refresher on business tax forms will help you go into this upcoming tax season prepared.
Most tax software, and certainly any tax professional, will guide you through which forms you’ll need to fill out for your situation. But to know what to expect and where to get the right forms will help set you up for success.
What is an IRS approved tax form?
If you’re wondering which forms are IRS approved, you can always reference irs.gov. In general, this is the place to look for any questions you have on tax forms and filing regulations.
Now let’s dive in.
Common tax forms you need to know
While every business will have a different tax situation, there are a few forms most businesses will need no matter what. Let’s break them down.
Form W-2
If you employ even one staff member, you’ll likely need W-2 forms. More specifically, you’ll need these forms for any employee for which you withheld income taxes from their compensation. This applies even if you yourself are the only employee on payroll. At Quill, we sell them in 6-part packs of various quantities to make it easy.
Form W-4
This form is actually for your employees to fill out. This is how they claim their withholdings, which lets you know how much to withhold in taxes.
Tip 1: It’s a good idea to have your employees review their W-4s at the beginning of every year to see if they want to make any updates.
Tip 2: Businesses are not regularly required to send copies of employees’ W-4 forms to the IRS but may be asked to do so in certain circumstances, so you’ll want to be prepared just in case.
Form W-9
You might be familiar with W-9s because you may have had to fill one out. This form is used when a business hires a vendor or a contractor. The purpose is to collect key personal information on individuals or businesses you engage with in order to properly prepare 1099 forms for them at tax time.
Form 1099
Generally, this form is required for contractors and other non-employees you’ve paid to provide services for your business throughout the year. Like a W-2, a 1099 must be sent out to the payee as well as the IRS.
There are many different types of 1099s – 21, in fact! But chances are you’ll only have to understand two different types, 1099-MISC and 1099-NEC. Let’s take a look at the differences between them.
Form 1099-MISC
Form 1099-MISC is sent out for payments that are less likely to be subject to a self-employment tax. This could include rent payments, prizes, or healthcare payments made out to various organizations or individuals.
Form 1099-NEC
1099-NEC stands for Non-Employee Compensation. This is what you’ll need if you worked with freelancers, contractors, or specialists on any of your projects this year.
Supplementary reading: If you think you may need a different type of 1099 for your tax situation, this CNET article does a great job of breaking down all 21 types.
Form 1040
This form is for sole proprietors to report their Profit or Loss from Business. If that’s you, this form is really important because it’s how you’ll calculate your tax bill (or refund) for the year.
Form 1096
You’ll only need a 1096 if you’re submitting your taxes by mail. It functions as a summary sheet for all your forms. The other unique thing about this form is that it cannot be printed; it must be purchased from the IRS or a third-party retailer (like Quill).
And that covers all the most common business tax forms. Now, a few more things to keep in mind for tax season.
Can I print tax forms on plain paper?
Maybe you want to download your forms and print them on your own. What kind of paper will you need? Well, it depends on the form.
For W-2 Copy A and W-3 forms, your standard office paper is acceptable. 1099 Form Copy A, however, uses red ink and must be ordered from the IRS or purchased from a tax supply vendor – although all other parts of 1099 Forms can be printed on plain paper. Then there are forms that require perforated paper, which are all forms you will send to employees.
Don’t forget the envelopes
You’re likely familiar with the double-window envelopes tax forms are mailed in. But you might not know that different forms require slightly different envelopes based on size and window placement. The easiest way to know you have the right envelopes for the right forms is to go with our tax form kits that include exactly what you’ll need. If you’d rather buy envelopes separately, we have those, too.
Tax season can be a stressful time for business owners and operators, but we hope this guide helps you feel more prepared. Remember, you can shop Quill for all the tax forms you may need this year.
Keep up with the Quill Blog for more business tips and resources.