Quick answer

The tax form your small business files depends mainly on your legal structure and tax elections: sole proprietors usually use Schedule C (Form 1040); partnerships file Form 1065; corporations file Form 1120 (C corps) or Form 1120‑S (S corps). Payroll, excise taxes or employee benefits can add separate filing obligations. See official IRS guidance for each form (Form 1040/Schedule C, Form 1065, Form 1120, Form 1120‑S).

How to decide — a practical checklist

  • Confirm your legal entity (sole proprietorship, partnership, LLC, S corp, C corp). The entity generally determines the primary federal return. See the SBA guide on choosing a business structure for basics: https://www.sba.gov/business-guide/launch-your-business/choose-business-structure.
  • Determine tax classification (for example, an LLC can be taxed as a sole proprietorship, partnership, or corporation).
  • Review whether the business has employees (payroll returns like Form 941) or specific excise taxes.
  • Compare tax consequences (pass‑through vs. entity level) and administrative costs.
  • When in doubt, consult a CPA or enrolled agent to avoid missed elections or late filings.

What each common form covers

  • Schedule C (Form 1040): Used by sole proprietors and single‑member LLCs taxed as disregarded entities to report business income and deductible expenses (see the IRS Schedule C page).
  • Form 1065: Partnership information return; the partnership itself generally pays no income tax but issues Schedule K‑1s to partners who report their shares on individual returns (see Form 1065 on IRS).
  • Form 1120: U.S. Corporation income tax return for C corporations; the entity pays tax on profits.
  • Form 1120‑S: For S corporation returns; profits and losses typically pass through to shareholders via Schedule K‑1.

(IRS reference pages: About Form 1040: https://www.irs.gov/forms-pubs/about-form-1040; About Form 1065: https://www.irs.gov/forms-pubs/about-form-1065; About Form 1120: https://www.irs.gov/forms-pubs/about-form-1120; About Form 1120‑S: https://www.irs.gov/forms-pubs/about-form-1120-s)

Common decision scenarios (real-world examples)

  • Single owner doing freelance work with no employees: Schedule C is usually appropriate; it keeps reporting on your personal 1040 and is simple to file. (In my practice I see many freelancers benefit from straightforward bookkeeping early on to preserve deductions.)
  • Two or more owners sharing profits and losses: Most partnerships file Form 1065 and issue K‑1s to partners.
  • A startup planning to reinvest profits and raise outside capital: Many choose a C corporation (Form 1120) for investor preferences, but that creates entity‑level tax.
  • Owners seeking self‑employment tax savings through reasonable payroll: Electing S‑corporation treatment (Form 1120‑S and Form 2553 election) can be worth discussing with a tax advisor.

Common mistakes to avoid

  • Assuming an LLC automatically files a corporate return — an LLC’s tax filing depends on its elected classification.
  • Missing payroll and employment filings when you have staff (Form 941, state payroll filings).
  • Late or missing elections (for example, S‑corp election requires timely filing of Form 2553 — consult IRS guidance).
  • Treating personal and business expenses the same: poor recordkeeping increases audit risk and can disallow deductions.

Practical next steps

  1. Confirm your legal formation documents and any past tax elections. 2. Run a brief profit/loss forecast to see whether pass‑through or corporate taxation is more favorable. 3. If you plan to change classification (for example, an LLC electing corporate taxation), review IRS forms and deadlines (Form 8832 for entity classification, Form 2553 for S‑corp election) and get pro help.

When to consult a tax pro

If you expect payroll, investors, multiple owners, changing ownership percentages, significant fringe benefits or you’re uncertain about tax elections, consult a CPA or enrolled agent. In my practice, a short consultation often prevents costly late filings or erroneous elections.

Internal resources

Authoritative resources

Disclaimer

This article is educational and does not replace personalized tax advice. Tax rules change; consult a qualified tax professional and review the IRS pages above for the most current filing requirements.