How Do I Use E-File for Federal Business Taxes?
The IRS provides a process for electronically filing federal tax returns, including individual and business income taxes and business payroll taxes. This is known as e-filing.
What Is E-File?
E-File is both a general term for filing tax returns online and a specific method for filing taxes.
For your individual tax return (Form 1040 or 1040-SR), you can file online using IRS Free File if your adjusted gross income (AGI) is $72,000 or less. If your AGI is above $72,000, you can use Free File Fillable Forms.
How to Use E-File for Business
For business income tax returns, you can use the IRS Modernized e-File (MeF) system:
- Form 1065 for partnerships and multiple-member LLCs
- Form 1120 for corporations
- Form 1120-S for S corporations
- Form 1120-F for foreign corporations
- Form K-1 for partners, LLC members, and S corporation owners.
You can also use the MeF system for filing employment tax returns, including:
- Form 940 annual federal unemployment (FUTA) tax return
- Form 941 quarterly tax report
- Form 943 annual federal tax return for agricultural employees
- Form 944 annual tax report
- Form 945 annual return of withheld federal income tax
To use MeF, you'll need to find an authorized provider to submit these forms for you. Here's a list of IRS-authorized MeF Providers for different types of forms.
There is a difference between filing forms and sending tax payments. E-File is for filing forms. To make payments with your filing, you may be able to use e-file, depending on the type of form.
To make payments without filing the form, you can use the IRS EFTPS system.
Tax Forms You Can E-File
E-filing options are different for different types of businesses.
Corporation and S corporation income tax returns must be filed using approved software or a tax professional who is an authorized e-file provider. This option is the one to use if you are an LLC electing to be taxed as a corporation or S corporation.
Certain corporate tax forms cannot be e-filed if they are filed individually, including:
- 1120-C (formerly 990-C) Farmer's Cooperative Association
- 1120-FSC Foreign Sales Corporations
- 1120-H Homeowners Association
- 1120-IC-DISC Interest Charge Domestic International Sales
- 1120-ND Nuclear Decommission Trusts
- 1120-REIT Real Estate Investment Trust
- 1120-RIC Regulated Investment Companies
- 1120-SF Settlement Funds
- 1120X Amended Return
However, if these forms are e-filed as part of a consolidated tax return, they can be attached as PDFs.
Personal income tax returns for business owners can be filed using the IRS FreeFile system, including:
- Schedule C for sole proprietors and single-member LLCs
- Schedule K-1 for partners, S corporation owners, and LLC members
Information returns can be e-filed using the IRS Filing Information Returns Electronically (FIRE) system, including:
- 1099 forms
- 1099-NEC for non-employees
Business employment tax returns, including payroll taxes and unemployment taxes, can be filed using the Modernized eFile system. You can make employment tax payments using the IRS EFTPS system. These forms include:
- Form 940
- Form 941
- Form 944
Excise taxes and use taxes may also be filed using the e-File system.
Two Parts of E-File: Filing and Paying
The IRS system has two parts: filing forms and paying taxes.
If you file electronically, you can pay your taxes along with your electronic filing by using electronic funds withdrawal, available with tax preparation software or through your tax preparer.
Paying taxes by phone or Internet using a debit or credit card is also an option, whether you file electronically or not.
Filing and Paying Business Income Taxes
Most small businesses file their business tax returns on Schedule C with their personal tax returns. In this case, you can file your business income tax return with your personal return, you can file in multiple ways.
- Use a tax preparer, like a CPA or Enrolled Agent, who is authorized by the IRS to e-file tax returns. You can ask your current tax preparer if he or she e-files (most do) or find an IRS-approved provider who can assist you with e-filing.
- Use one of the tax preparation software services, like TurboTax, TaxACT, or H&R Block AtHome. All include e-filing in their tax software packages.
- Use the IRS Free File system, which takes you through the process of filing online or creating fillable forms, depending on your adjusted gross income.
If your business is a partnership, corporation, or S corporation, you will probably want to use a tax preparer to help you create your corporate tax return and file your corporate taxes.
Payment Options for Small Business Income Taxes
If you pay your business income taxes along with your personal tax return, you can pay your taxes in several ways. You can use electronic funds transfer, available through your tax preparer, or you can use tax preparation software.
You will need to provide information about your bank account's routing number and account number. You can't use this option with Form 943 and Form 945.
You may also pay by using a credit card or debit card, through a service provider. See the list of IRS-approved E-Pay Service Providers and their fees. This list also includes combined e-file and e-pay providers.
Credit card and debit card payments are not accepted for these IRS forms: 720, 990, 1120, 2290, 7004, and 8868.
Paying Business Taxes with EFTPS
You can sign up for and use the Electronic Federal Tax Payment System (EFTPS) for paying all business taxes, including employment taxes, corporate income taxes, and excise taxes.
What About the Federal Tax Coupon 8109?
Form 8109-B Federal Tax Deposit Coupon was used before 2011 to make deposits for payroll taxes, corporate income taxes, and other tax deposits. Now, the IRS will not accept deposit coupons.
You must use the Electronic Federal Tax Payment System (EFTPS) for all federal employment taxes which were previously filed with Payment Coupon 8109.
For a complete list of IRS forms which may be e-filed, go to the IRS e-file list.