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.