The 7 Tax Forms Every Small Business Owner Must Master

Here is a closer look at annual tax filings the IRS will demand of your small business, including what to expect when preparing each form.

Woman business owner wrapping a package and checking her financials on her tablet.

By the Roll Editorial Team on March 04, 2024

5 min read

Shorter days. Colder nights. Snow. For small business owners, the traditional signs of the festive season are a reminder that tax filing season isn't far behind. Let's get started now! Here is a closer look at annual tax filings the IRS will demand of your small business, including what to expect when preparing each form.

940: Filed annually by Jan. 31, the 940 form captures the amount of federal unemployment tax (FUTA) your small business actually paid versus what it owed during the tax year. Don't take this form lightly; odds are you'll have owed some tax. Small businesses that have at least one employee on payroll for 20 weeks or more, or which pay their employees at least $1,500 in wages, are subject to FUTA. Owe more than $500 and your business will be required to deposit funds quarterly. That's not all. States also charge their own version of FUTA called SUTA (i.e., state unemployment tax) and it, too, is due quarterly. A good payroll solution, like Roll by ADP can help you keep track.
941: Filed quarterly and due 30 days after the close of each quarter — so, for example, April 30 for reporting 1st quarter data — the 941 encapsulates all gross wages paid as well as FICA withholding for your employees during the period. (FICA refers to the Federal Insurance Contributions Act and specifies the percentage of Social Security and Medicare tax to withhold for each paycheck — presently 6.2% and 1.45%, respectively.) Also, be aware that gross wages include tips for service employees such as waitstaff, baristas, and delivery drivers. Be accurate in your reporting; the IRS will cross-check the numbers from every form you file.

944: This form is interesting in that you need special permission to file it. The IRS says so in the upper right corner of the document: "You must file annual Form 944 instead of filing quarterly Forms 941 only if the IRS notified you in writing." The spirit at work here is to reduce paperwork for smaller employers that report no more than $1,000 in combined FICA and federal payroll tax obligations. Businesses that qualify for filing the 944 instead of the quarterly 941 will do so by Jan. 31 of the following year.

W-2: Depending on the number of people on staff, your small business could be filing a lot of these to your employees (and to the IRS and relevant state tax authorities on their behalf). Due Jan. 31 of the following tax year, the W-2 is officially known as a "wage and tax statement" because it includes a breakdown of gross wages paid plus taxes withheld, including federal, state, and Social Security and Medicare taxes. In that sense, the W-2 is the essential form your employees will need to file their own personal federal and state income taxes each year.

W-3: Think of the W-3 as a summary filing that encapsulates everything you'll be submitting via W-2. The forms are structured the same. One difference: instead of filing directly to the IRS, you'll file the W-3 and copies of all W-2s to the Social Security Administration by Jan. 31 of the following year. Pro tip: use the exercise of completing the W-3 as an opportunity to check all the numbers in your other annual payroll tax filings.

1099-NEC: Do you use contractors? If so, you could be filing as many (or more) of these forms as you do W-2s. Much like how the W-2 specifies the amount of compensation paid to full-time employees, the 1099-NEC specifies what you've paid to each contractor that's performed work on behalf of your small business. Also like the W-2, the 1099-NEC is due to contractors and to the IRS by Jan. 31 of the next year.

1095-B or C: These forms relate to health insurance coverage for employees. Form B is for small businesses that self-insure. Form C is for those businesses employing 50 or more full-time and which use a third-party insurance provider to supply coverage. In each case, these forms summarize coverage both for your employees and the IRS. Deadlines for filing are Jan. 31 for sending to employees and Feb. 28 for the IRS (or March 31 if filing electronically).

There's much more to entrepreneurship than providing a great product or service at a fair price to keep customers coming back. Each year also brings a plethora of tax filings shortly after the turn of the calendar. Don't wait for the looming deadlines! Now's the time to crunch the numbers and get your documents organized. Or, even better, explore using an app like Roll to automate the calculations and simplify filing. Either way, small business tax season is almost here — make sure you're ready for it.