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.
All small businesses must file both federal and state income tax returns. However, the type of tax filing will vary with the business structure you use for your company. Some tax responsibilities are rather simple, such as those for a sole proprietorship, while others, like those for C corporations, are more complex.ole Proprietorship. The simplest type of small-business structure, a sole proprietorship, also allows for the easiest way to file income taxes. The choices are also simple, since all profits pass on to the owner. The only form necessary is a Schedule C attached to the owner's personal tax return, a standard Form 1040.