A small business distinguishes between items purchased for the short term and long-term expenditures, both in accounting and in taxes. Capital expenditures are business improvements, upgrades or expansions. A capitalized expenditure is primarily a tax term, reflecting depreciation for loss of value over a period of years.
Use Form 1040-ES â You can calculate your quarterly estimated tax payment using Form 1040-ES (the same form used to pay estimated taxes), which includes a worksheet that helps you estimate how much you owe for the current year. Corporations should use Form 1120-W to calculate estimated taxes. Refer to Last Yearâs Return â If you have been in business for a while, you can refer to your previous year's federal tax return.
The form of business organization that you have chosen will determine the type of tax form you will use for filing and paying your taxes. Determine whether your business is a sole proprietorship, corporation, partnership, S corporation, or a limited liability company.Your form of accounting, tax year, and type of business entity helps determine what forms you use to file your federal business taxes and pay your taxes.ince businesses that are sole proprietorships file taxes with the owner, this is the appropriate form for the sole proprietorship. Unless the sole proprietorship anticipates taking a loss, it should file estimated taxes or face paying penalties and interest.