Building Your Business Business Taxes How to Make Business Tax Payments What You Need to Know About Filing Your Business Tax Return By Jean Murray Updated on December 16, 2022 Fact checked by Taylor Tompkins In This Article View All In This Article Completing and Filing Your Business Tax Return Paying Self-Employment Tax Paying Business Taxes for Corporations Paying Business Taxes—Options for Small Business Owners Paying Estimated Taxes What If You Can't Pay? Frequently Asked Questions (FAQs) Photo: Luis Alvarez/Getty Images Many small business owners pay taxes on their company's income through their personal tax returns. You'll pay business taxes through your personal tax return if you're a sole proprietor or if your business is a single-owner LLC. Corporations and partnerships report income differently than sole proprietors do. Key Takeaways You can file your business taxes through your personal tax return in most cases.To pay your tax bill, you can use a number of processes set up by the IRS, including payment plans.Another tax option for businesses is quarterly payments of estimated taxes throughout the year. Completing and Filing Your Business Tax Return Most small business owners pay taxes on their company's income through their personal tax returns (Form 1040 or Form 1040-SR for seniors.) Corporations must pay tax on business income through a corporate tax return—Form 1120. A single-owner business (sole proprietor or single-owner LLC) reports business income on Schedule C. A partner in an S corporation, a partner in a partnership, or a member (owner) of a multiple-member LLC reports their share of business income on Schedule K-1. Corporate owners who receive dividends should complete Schedule B (Interest and Ordinary Dividends) showing the dividends they received. S corporation owners may also receive income as an employee. This income is reported on a W-2 form and included on the owner's tax return. Note LLCs can choose to pay business taxes as a partnership, a C corporation, or an S corporation, if they qualify. Learn more about how to change your LLC tax status. Paying Self-Employment Tax Paying your business taxes also means paying self-employment tax (Social Security and Medicare taxes), unless you own a corporation or S corporation. Self-employment tax is calculated on your net income from your business, or your portion of the total net income, on Schedule SE. This tax is included in your total income and tax calculation. Paying Business Taxes for Corporations The best way for a corporation to pay its business taxes is through the Electronic Federal Tax Payment System (EFTPS). You will need to set up an account using your Taxpayer ID (EIN or SSN), a PIN number, and an internet password. You can schedule your payments in advance and track payments with email notifications. You can also use EFTPS to make employment tax payments and estimated tax payments for your corporation. Paying Business Taxes—Options for Small Business Owners You have several options for paying your combined business and personal taxes. Direct Pay You can use Direct Pay to pay Form 1040 taxes and estimated taxes from your bank account. To make a payment, follow the Direct Pay online instructions, selecting the reason for payment. You must pay through a United States bank account. Pay With a Credit or Debit Card You can use one of the IRS-approved payment processors to make a credit or debit card payment to the IRS. Each of these processors charges a fee, which doesn't go to the IRS. Card-processing fees are tax-deductible for business taxes. Pay When You E-File You can pay by debit or credit card when you e-file your taxes using a combined business and personal tax preparation software program or through a service provider. Most of these software providers include the processing fee in their cost. Note If your business has employees, you will need to use the EFTPS system to make payroll tax deposits for federal income tax withholding, FICA taxes (Social Security and Medicare), and federal unemployment taxes. Paying Estimated Taxes One way to avoid a large tax bill with fines and penalties for underpayment is to pay quarterly estimated taxes. All of the options above are available for paying your estimated taxes. Your first estimated payment for the year is usually due on or around April 15, along with your tax bill. Then, you make three more payments—June 15, Sept. 15, and Jan. 15 of the next year. If you pay your business income taxes as part of your 1040, make estimated payments as an individual. Corporations generally have to make estimated payments if they expect to owe $500 or more when the return is filed. If you file using business tax software or a tax preparer, they should give you a schedule of estimated payments for the year. You can do a quick calculation of the amount of estimated taxes you need to pay. And don't forget to include self-employment tax. Paying for Tax Preparation Paying for tax preparation can be divided easily between your business tax form (Schedule C or Schedule K-1) and your personal tax return. Ask your tax preparer to divide your bill into two parts: one part for the preparation of the business tax form, and one part for the preparation of your Form 1040. Then pay the bill for the business tax form with your business account or card. Self-employment taxes are considered a personal expense, so you shouldn't pay those with your business account. What If You Can't Pay? Your tax bills—business and personal—are due on the same date your taxes are due. The IRS offers several options if you can't pay your taxes on the due date. Payment Plan You can apply for a payment plan (including an installment agreement) to pay your taxes over time. You can apply for a short-term plan, paying within 120 days, or a longer-term plan. Apply with an online application, and get immediate notification of approval. The IRS charges a fee for payment plans and interest, and penalties may continue in some cases until the balance is paid. Note Business installment payment plans and personal installment payment plans are both available. Frequently Asked Questions (FAQs) What is the easiest way to pay estimated taxes? The IRS recommends that individuals and businesses who need to pay estimated taxes use the Electronic Federal Tax Payment System (EFTPS). You can make all your federal tax payments using the system, and you'll have access to a history of your payments, so you'll have proof of when you paid, and how much you paid. How much does a small business have to make to file taxes? If you made more than $400 or more in a given year from self-employment, you have to file an income tax return. You may still have to file an income tax return even if your self-employment earnings were less than $400 - check the filing requirements listed in Form 1040 and 1040-SR to be sure. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Internal Revenue Service. "1040-SR, U.S. Tax Return for Seniors." Internal Revenue Service. "About Form 1120, U.S. Corporation Income Tax Return." Internal Revenue Service. "Self-Employment Tax (Social Security and Medicare Taxes)." Internal Revenue Service. "EFTPS: The Electronic Federal Tax Payment System." Internal Revenue Service. "Direct Pay." Internal Revenue Service. "Additional Information on IRS Direct Pay." Internal Revenue Service. "Pay Your Taxes by Debit or Credit Card." Internal Revenue Service. "Pay by Debit or Credit Card When You E-file." Internal Revenue Service. "Depositing and Reporting Employment Taxes." Internal Revenue Service. "Frequently Asked Questions: When Are Quarterly Estimated Tax Payments Due?" Internal Revenue Service. "Estimated Taxes." Internal Revenue Service. "Additional Information on Payment Plans." Internal Revenue Service. "Apply Online for a Payment Plan." Internal Revenue Service. "Estimated Taxes." Internal Revenue Service. "Self-Employed Individuals Tax Center."