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Archive for the ‘Business Taxes’ Category

Partnership of a business needs to be established to distribute shares of the business.  Each individual is responsible for the taxes filed on their share and must report and file an information return with the IRS stating all taxable income and tax deductions with a distributive share of their profits, losses, and deductions.

Deductions include (but are not limited to the following):

• start up cost
• operating expenses
• travel expenses
• advertisement of product
• portions of money on food and entertainment
• self employment tax contributions
• social security benefits
• medicare programs

Partnerships need to file a 1065 information return form to IRS to determine whether portions are reporting income correctly,schedule K, break down of each portion,share of business, profits and losses.

Estimated income taxes are usually filed in a partnership business since their is no employer to withhold income taxes, each individual income tax must set aside money to pay their share of annual tax.

For future cover expenses, expanding, or retaining profits in your partnership, you may want to consider incorporating your business which may help you pay less taxes.