Tax Returns and Dates for the Self-Employed / Sole Proprietors.
A sole proprietor is someone who owns an unincorporated business.
If you are a sole proprietor use the information below to help you determine some of the forms that you may be required to file at the federal level (Internal Revenue Service).
You need to file an Income Tax Return:
- U.S. Residents need to file a 1040, U.S. Individual Income Tax Return and Schedule C (Form 1040), Profit or Loss from Business or Schedule C-EZ (Form 1040), Net Profit from Business.
- Puerto Rico Bona Fide Residents need to file a 482 Puerto Rico Income Tax Return or 482 Puerto Rico Income Tax Return (Option 94), along with the type of Schedule that fits your particular business activity.
You also need to file Self-Emploment Tax Returns:
- Schedule SE (Form 1040), Self-Employment Tax Return
- Puerto Rico Bona Fide Residents have the option of filing Form 1040-PR, Puerto Rico Self-Employment Tax Return
You need to file Estimated Tax payments quarterly:
- U.S. Taxpayers and Puerto Rico Residents 1040-ES, Estimated Tax for Individuals (Puerto Rico Residents need to deposit Self-Employment Tax Estimate Payments)
- Puerto Rico taxpayers need to file Estimated Tax Payment Vouchers on a quarterly basis. These payments are for income tax estimate payments, while the 1040-ES is for Self-Employment Tax Estimate Payments.
If you the sole proprietor has employees, it must file Form 941, 940 and W-2s at the IRS and W-3s at the Social Security Administration.
- 941, Employer’s Quarterly Federal Tax Return
- 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return
- W-2, Wage and Tax Statement (to employee as well) and
- W-3, Transmittal of Wage and Tax Statements (to the Social Security Administration)
If you make payments to other individuals and corporations, you might have to file a 1099 at the IRS or a 480 to the Department of Treasury of Puerto Rico:
- US Businesses – Information Returns – Internal Revenue Service
- Puerto Rico Businesses – Informative Returns (Informativas) – Department of Treasury of Puerto Rico
If you are selling products and services, you need to file Sales Tax Returns.
- Excise or Sales tax returns depend on the state where you operate.
- Puerto Rico businesses must file Sales & Use Tax Returns every month. For more information on when and how to file, please visit the Sales & Use Tax website of the Department of Treasury.
Most of these tax returns are due on a quarterly basis, except for the Income Tax Returns, and the W-2, W-3 and Information Returns, which are due annually. While you should verify which dates apply to you and your business specifically, generally the following due dates apply to most taxpayers.
- US and Puerto Rico Income Tax Returns are due April 15 of every year.
- Informative Returns are due February 28 of every year. Not the 29th the years that February has 29 days.
- W-2 Wage and Tax Statements are due January 31 of every year.
If you have a question, or comment related to the compliance of running your business as a sole proprietorship, feel free to send me an email to the contact information below. Maybe I can help!