Your Tax Reports
So far, we’ve discussed how you as an owner pay your employees’ taxes. When it comes to your own taxes, this involves different types of forms, depending on how you have organized your business.
If you are a sole proprietor, you would report all your earnings on a Schedule C, “Profit or Loss from a Business or Profession” at the end of the year. Any funds you withdraw from the business during the year should be tracked in the Equity account, Drawing (3400).
As a sole proprietor, you don’t include any of your personal estimated tax payments on the employer’s federal forms. Instead you make quarterly estimated tax payments using Form 1040-ES. This should include your Social Security and Medicare taxes due, as well as your income ...