Bookkeeping Basics For Startups: An Introduction To Forms Of Business Organization And Taxation: Reasons For Keeping Records
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There are five basic legal forms of business structures found in the United States: C corporations, S corporations, sole proprietorships, partnerships, and Limited Liability Companies (LLCs). In order to understand business income taxes, we can start with how the business forms are different. The meaning of business taxation refers to the taxes that businesses must pay as a normal part of business operations.
This publication provides basic federal tax information for people who are starting a business. It also provides information on keeping records and illustrates a recordkeeping system.
Throughout this publication, we refer to other IRS publications and forms where you will find more information. In addition, you may want to contact other government agencies, such as the Small Business Administration (SBA).
The most common forms of business are sole proprietorship, partnership, and corporation. When beginning a business, you must decide which form of business to use. Legal and tax considerations enter into this decision. Only tax considerations are discussed in this publication
Your form of business determines which income tax return form you have to file. See Table 2 to find out which form you have to file
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