S Corporations

An eligible domestic corporation can avoid double taxation (once to the shareholders and again to the corporation) by electing to be treated as an S corporation. Generally, an S corporation is exempt from federal income tax other than tax on certain capital gains and passive income. On their tax returns, the S corporation's shareholders include their share of the corporation's separately stated items of income, deduction, loss, and credit, and their share of no separately stated income or loss.

If you are an S corporation use the information in the charts below to help you determine some of the forms that you may be required to file.

Corporations

In forming a corporation, prospective shareholders exchange money, property, or both, for the corporation's capital stock. A corporation generally takes the same deductions as a sole proprietorship to figure its taxable income. A corporation can also take special deductions. For federal income tax purposes, a C corporation is recognized as a separate taxpaying entity. A corporation conducts business, realizes net income or loss, pays taxes and distributes profits to shareholders.

The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. This creates a double tax. The corporation does not get a tax deduction when it distributes dividends to shareholders. Shareholders cannot deduct any loss of the corporation.

If you are a C corporation or an S corporation use the information in the charts below to help you determine some of the forms that you may be required to file.

Corporations that have assets of $10 million or more and file at least 250 returns annually are required to electronically file their Forms 1120 and 1120S for tax years ending on or after December 31, 2006. For more e-file information, see References/Related Topic listed below.

Partnerships

A partnership is the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business.

A partnership must file an annual information return to report the income, deductions, gains, losses, etc., from its operations, but it does not pay income tax. Instead, it "passes through" any profits or losses to its partners. Each partner includes his or her share of the partnership's income or loss on his or her tax return.

Partners are not employees and should not be issued a Form W-2. The partnership must furnish copies of Schedule K-1 (Form 1065) to the partners by the date Form 1065 is required to be filed, including extensions.

If you are a partnership or a partner (individual) in a partnership, use the information in the charts below to help you determine some of the forms that you may be required to file.

Sole Proprietorships

A sole proprietor is someone who owns an unincorporated business by himself or herself. However, if you are the sole member of a domestic limited liability company (LLC), you are not a sole proprietor if you elect to treat the LLC as a corporation.

If you are a sole proprietor use the information in the chart below to help you determine some of the forms that you may be required to file.

IF you are liable for: THEN use Form:

Income Tax 1040 (PDF) and Schedule C (PDF) or C-EZ (PDF)

Self-employment tax Schedule SE (PDF)

Estimated tax 1040-ES (PDF)

Social security and Medicare taxes and income tax withholding

941 (PDF) or 944 (PDF)

8109 (PDF) (to make deposits)

Providing information on social security and Medicare taxes and income tax withholding

W-2 (PDF) (to employee)

W-2 (PDF) and W-3 (PDF) (to the Social Security Administration)

Federal unemployment (FUTA) tax

940 (PDF)

8109 (PDF) (to make deposits)

Filing information returns for payments to no employees and transactions with other persons

See Information Returns

Excise Taxes Refer to the Excise Tax web page

References/Related Topics

*

Other Useful Forms for Sole Proprietorship

*

Publication 334, The Tax Guide for Small Business (for Individuals Who Use Schedule C or Schedule C-EZ)

*

Publication 583, Starting a Business and Keeping Records

*

Husband and Wife Businesses

*

Business Structures

*

Distinguishing Between Self-Employed Individuals and Independent Contractors

Business Structures

When beginning a business, you must decide what form of business entity to establish. Your form of business determines which income tax return form you have to file. The most common forms of business are the sole proprietorship, partnership, corporation, and S corporation. A Limited Liability Company (LLC) is a relatively new business structure allowed by state statute. Legal and tax considerations enter into selecting a business structure.

* Sole Proprietorships

* Partnerships

* Corporations

* S Corporations

* Limited Liability Company (LLC)

Residential

Residential real estate means all Australian urban land other than commercial properties (that is offices, factories, warehouses, restaurants, shops). Acquisitions of 'hobby farms' and 'rural residential' blocks by foreign interests are included in the residential real estate category.

Foreign purchasers intending to acquire real estate in Australia must seek prior approval from the Government through the Foreign Investment Review Board unless specifically exempted by the Foreign Acquisitions and Takeovers Regulations.

Sources of Additional Information

Information on employment opportunities for sales worker supervisors may be obtained from the employment offices of various retail establishments or from State employment service offices.

General information on management careers in retail establishments is available from:

* National Retail Federation, 325 7th St. NW., Suite 1100, Washington, DC 20004.

Information about management careers and training programs in the motor vehicle dealers industry is available from:

* National Automobile Dealers Association, Public Relations Dept., 8400 Westpark Dr., McLean, VA 22102-3591. Internet: http://www.nada.org

Information about management careers in convenience stores is available from:

* National Association of Convenience Stores, 1600 Duke St., Alexandria, VA 22314-3436.

Related Occupations

Sales worker supervisors serve customers, supervise workers, and direct and coordinate the operations of an establishment. Workers with similar responsibilities include financial managers, food service managers, lodging managers, office and administrative support worker supervisors and managers, and medical and health services managers.

OES Data

For the latest wage information:

The above wage data are from the Occupational Employment Statistics (OES) survey program, unless otherwise noted. For the latest National, State, and local earnings data, visits the following pages:

# First-line supervisors/managers of retail sales workers

# First-line supervisors/managers of non-retail sales workers

Earnings

Salaries of sales worker supervisors vary substantially, depending on a worker’s level of responsibility and length of service and the type, size, and location of the firm.

Salaried supervisors of retail sales workers had median annual earnings of $33,960, including commissions, in May 2006. The middle 50 percent earned between $26,490 and $44,570 a year. The lowest 10 percent earned less than $21,420, and the highest 10 percent earned more than $59,710 a year. Median annual earnings in the industries employing the largest numbers of salaried supervisors of retail sales workers were as follows:

Building material and supplies dealers $35,820

Grocery stores 33,390

Clothing stores 33,140

Gasoline stations 29,270

Other general merchandise stores 28,870

Salaried supervisors of nonretail sales workers had median annual earnings of, $65,510, including commissions, in May 2006. The middle 50 percent earned between $48,900 and $94,670 a year. The lowest 10 percent earned less than $34,840, and the highest 10 percent earned more than $135,270 a year. Median annual earnings in the industries employing the largest numbers of salaried supervisors of nonretail sales workers were as follows:

Professional and commercial equipment and supplies merchant wholesalers $80,650

Wholesale electronic markets and agents and brokers 78,260

Machinery, equipment, and supplies merchant wholesalers 65,660

Postal service 58,640

Business support services 45,490

Compensation systems vary by type of establishment and by merchandise sold. Many supervisors receive a commission or a combination of salary and commission. Under a commission system, supervisors receive a percentage of department or store sales. Thus, these supervisors’ earnings depend on their ability to sell their product and the condition of the economy. Those who sell large amounts of merchandise or exceed sales goals often receive bonuses or other awards.

Projections data from the National Employment Matrix Occupational title

SOC Code

Employment, 2006

Projected
employment,
2016

Change, 2006-16

Detailed statistics
Number

Percent

Supervisors, sales workers

41-1000

2,206,000

2,296,000

91,000

4

PDF

zipped XLS

First-line supervisors/managers of retail sales workers

41-1011

1,676,000

1,747,000

71,000

4

PDF

zipped XLS

First-line supervisors/managers of non-retail sales workers

41-1012

530,000

549,000

19,000

4

PDF

zipped XLS

NOTE: Data in this table are rounded. See the discussion of the employment projections table in the Handbook introductory chapter on Occupational Information Included in the Handbook.

Job Outlook

Despite slower than average growth, retail sales worker supervisors with previous experience in sales are expected to have good job prospects because of the large size of the occupation and the need to replace workers who leave their positions.

Employment change. Employment of sales worker supervisors is expected to grow by 4 percent between 2006 and 2016, which is more slowly than the average for all occupations. Growth in the occupation will be limited as retail companies increase the responsibilities of retail salespersons and existing sales worker supervisors.

The Internet and electronic commerce are creating new opportunities to reach and communicate with potential customers. Some firms are hiring Internet sales supervisors, who are in charge of maintaining an Internet site and answering inquiries relating to the product, to prices, and to the terms of delivery. However, Internet sales and electronic commerce may reduce the number of additional sales workers needed in stores, thus reducing the total number of additional supervisors required. Overall, the impact of electronic commerce on employment of sales worker supervisors should be minimal.

Projected employment growth of sales worker supervisors will mirror, in part, the patterns of employment growth in the industries in which they work. For example, faster-than-average employment growth is expected in many of the rapidly growing service-providing industries. In contrast, the number of self-employed sales worker supervisors is expected to grow slowly as independent retailers face increasing competition from national chains.

Unlike mid-level and top-level managers, retail store managers generally will not be affected by the restructuring and consolidation taking place at the corporate headquarters of many retail chains.

Job prospects. Candidates who have retail experience—as a salesperson, cashier, or customer service representative, for example—will have the best opportunities for jobs as supervisors, especially in retail establishments. Stronger competition for supervisory jobs is expected in non-retail establishments, particularly those with the most attractive earnings and work environment.

Some of the job openings over the next decade will occur as experienced supervisors move into higher levels of management, transfer to other occupations, or leave the labor force. However, these job openings will not be great in number since, as with other supervisory and managerial occupations, the separation rate is low. This is the case especially for non-retail sales worker supervisors.

Employment

Sales worker supervisors held about 2.2 million jobs in 2006. Approximately 37 percent were self-employed, most of whom were store owners. About 44 percent of sales worker supervisors were wage-and-salary workers employed in the retail sector; some of the largest employers were grocery stores, department stores, motor vehicle and parts dealers, and clothing and clothing accessory stores. The remaining sales worker supervisors worked in non-retail establishments.

Employment

Sales worker supervisors held about 2.2 million jobs in 2006. Approximately 37 percent were self-employed, most of whom were store owners. About 44 percent of sales worker supervisors were wage-and-salary workers employed in the retail sector; some of the largest employers were grocery stores, department stores, motor vehicle and parts dealers, and clothing and clothing accessory stores. The remaining sales worker supervisors worked in non-retail establishments.

Training, Other Qualifications, and Advancement

Sales worker supervisors usually gain knowledge of management principles and practices through work experience. Many supervisors begin their careers on the sales floor as salespersons, cashiers, or customer service representatives. These workers should be patient, decisive, and sales-oriented.

Education and training. The educational backgrounds of sales worker supervisors vary widely. Supervisors who have postsecondary education often hold associate or bachelor’s degrees in liberal arts, social sciences, business, or management. Recommended high school or college courses include those related to business, such as accounting, marketing, management, and sales, and those related to social science, such as psychology, sociology, and communication. Supervisors also must know how to use computers because almost all cash registers, inventory control systems, and sales quotes and contracts are computerized. To gain experience, many college students participate in internship programs that usually are developed jointly by schools and businesses.

Having previous sales experience is usually a requirement for becoming a sales worker supervisor. Most sales worker supervisors have retail sales experience or experience as a customer service representative. In these positions, they learn merchandising, customer service, and the basic policies and procedures of the company.

The type and amount of training available to supervisors varies by company. Many national retail chains and companies have formal training programs for management trainees that include both classroom and on-site training. Training time may be as brief as 1 week or may last more than 1 year, giving trainees experience during all sales seasons.

Ordinarily, classroom training includes topics such as interviewing, customer service skills, inventory management, employee relations, and scheduling. Management trainees may work in one specific department while training on the job, or they may rotate through several departments to gain a well-rounded knowledge of the company’s operation. Training programs for retail franchises are generally extensive, covering all functions of the company’s operation, including budgeting, marketing, management, finance, purchasing, product preparation, human resource management, and compensation. College graduates usually can enter management training programs directly, without much experience.

Other qualifications. Sales worker supervisors must get along with all types of people. They need initiative, self-discipline, good judgment, and decisiveness. Patience and a conciliatory temperament are necessary when dealing with demanding customers. Supervisors also must be able to motivate, organize, and direct the work of subordinates and communicate clearly and persuasively with customers and other supervisors.

Advancement. Supervisors who display leadership and team-building skills, self-confidence, motivation, and decisiveness become candidates for promotion to assistant manager or manager. A postsecondary degree may speed their advancement into management because employers view it as a sign of motivation and maturity—qualities deemed important for promotion to more responsible positions. In many retail establishments, managers are promoted from within the company. In small retail establishments, where the number of positions is limited, advancement to a higher management position may come slowly. Large establishments often have extensive career ladder programs and may offer supervisors the opportunity to transfer to another store in the chain or to the central office. Although promotions may occur more quickly in large establishments, some managers may need to relocate every several years in order to advance.

Supervisors also can become advertising, marketing, promotions, public relations, and sales managers—workers who coordinate marketing plans, monitor sales, and propose advertisements and promotions—or purchasing managers, buyers, or purchasing agents—workers who purchase goods and supplies for their organization or for resale. (These occupations are covered elsewhere in the Handbook.)

Some supervisors who have worked in their industry for a long time open their own stores or sales firms. However, retail trade and sales occupations are highly competitive, and although many independent owners succeed, some fail to cover expenses and eventually go out of business. To prosper, owners usually need good business sense and strong customer service and public relations skills.

Nature of the Work

Sales worker supervisors oversee the work of sales and related workers, such as retail salespersons, cashiers, customer service representatives, stock clerks and order fillers, sales engineers, and wholesale sales representatives. Sales worker supervisors are responsible for interviewing, hiring, and training employees. They also may prepare work schedules and assign workers to specific duties. Many of these supervisors hold job titles such as sales manager or department manager. Under the occupational classification system used in the Handbook, however, workers who mainly supervise workers and who do not focus on broader managerial issues of planning and strategy are classified as supervisors.

In retail establishments, sales worker supervisors ensure that customers receive satisfactory service and quality goods. They also answer customers’ inquiries, deal with complaints, and sometimes handle purchasing, budgeting, and accounting.

Responsibilities vary with the size and type of establishment. As the size of retail stores and the types of goods and services increase, supervisors tend to specialize in one department or one aspect of merchandising. Sales worker supervisors in large retail establishments are often referred to as department supervisors or managers. They provide day-to-day oversight of individual departments, such as shoes, cosmetics, or housewares in department stores; produce or meat in grocery stores; and car sales in automotive dealerships. Department supervisors establish and implement policies, goals, and procedures for their specific departments; coordinate activities with other department heads; and strive for smooth operations within their departments. They supervise employees who price and ticket goods and place them on display; clean and organize shelves, displays, and inventories in stockrooms; and inspect merchandise to ensure that nothing is outdated. Sales worker supervisors also review inventory and sales records, develop merchandising techniques, and coordinate sales promotions. In addition, they may greet and assist customers and promote sales and good public relations.

Sales worker supervisors in non-retail establishments oversee and coordinate the activities of sales workers who sell industrial products, insurance policies, or services such as advertising, financial, or Internet services. They may prepare budgets, make personnel decisions, devise sales-incentive programs, and approve sales contracts.

In small or independent companies and retail stores, sales worker supervisors not only directly supervise sales associates, but they also are responsible for the operation of the entire company or store. Some are self-employed business or store owners.

Work environment. Most sales worker supervisors have offices. In retail trade, their offices are within the stores, usually close to the areas they oversee. Although they spend some time in the office completing merchandise orders or arranging work schedules, a large portion of their workday is spent on the sales floor, supervising employees or selling.

Work hours of supervisors vary greatly among establishments because work schedules usually depend on customers’ needs. Supervisors generally work at least 40 hours a week. Long, irregular hours are common, particularly during sales, holidays, and busy shopping seasons and at times when inventory is taken. Supervisors are expected to work some evenings and weekends but usually are given a day off during the week. Hours can change weekly, and supervisors sometimes must report to work on short notice, especially when employees are absent. Independent owners often can set their own schedules, but hours must be convenient to customers.