The Small Business Tax Hub

There are a number of different forms and filing requirements if you are self-employed, but the forms that are essential are:

• Form 1040 – The form that determines your federal income tax for the year
• Schedule SE – The form used to determine your Self-Employment Tax
• Schedule C – The form used to deduct your business expenses

Aside from the above, there are a number of factors that may determine what forms to file and filing requirements, including your state of residence, additional income streams, and major life events. This checklist can help you determine your filing requirements.

You can find (and fill out!) Form 1065 in our Form 1065 guide or on the IRS website.

According to the IRS, “your recordkeeping system should include a summary of your business transactions.” However, this does not mean that you need to keep every single physical receipt. Supporting business documents may include the following:

• Invoices
• Deposit Information (for cash and credit transactions)
• Receipt Books
• Forms 1099-MISC
• Account statements

The IRS is required to accept digital forms of proof for your deductions, so keeping physical receipts is not mandatory. As long as you maintain your records with the types of supporting business documents approved by the IRS, you’ll be able to substantiate expenses, purchases, and other transactions, as necessary.

You can find a 1040 Form with Schedule C in our Schedule C form guide or on the IRS website.

For Lili customers, Lili’s Tax Preparation software automatically generates a pre-filled Schedule C form, to help make filing taxes quick and easier.

You can find the Schedule SE form in our Schedule SE form guide or on the IRS website.

Your client or employer should send you a copy of your 1099 form by January 31. If, however, your total payments for the year are less than $600, they are not obligated to send you a 1099 form.

If your client or employer doesn’t send you a 1099 form (whether you earned more or less than $600), you are still required to report your taxable income when filing your tax return. You can request the 1099 form from your client/employer, or instead use supporting business documents (e.g. invoices) to calculate the taxable income and include it on your tax return.

You may also order a ‘Wage and Income Transcript‘ from the IRS, which will display all of the income you earned, as reported to the IRS.

Form 1099-K reports all the payments a business received during the calendar year from card-based transactions and third-party payment processors (e.g. PayPal and Venmo). The main purpose of Form 1099-K is to help taxpayers operating businesses accurately report their business income and pay the correct amount of tax to the IRS.

Form 1099-K is issued by payment processors, not your clients. You’ll receive Form 1099-K if you set up your payment account as a business account and you’ve surpassed the thresholds of receiving gross payments for goods or services greater than $20,000 as well as more than 200 transactions in the calendar year.

After you receive your Form 1099-K, compare it with your business records to ensure its accuracy. If you find any inaccuracies, contact the issuer to correct the issue and ask them to issue an updated form.

In order to help ensure error-free tax filing and maximize deductions, make sure you bring all of the necessary documents to your CPA, including:

1. Your Social Security information and proof of identification (for everyone included on your tax return)
2. Income statements (from your employer and for any other sources of income)
3. Proof of expenses
4. Real estate documents
5. Your previous tax return