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Navigating Roadblocks

Get a firm grasp on your business taxes to avoid complications.

This story appears in the December 1996 issue of Business Start-Ups magazine.

Here's a happy thought: The more money your new business makes, the more income tax you will have to pay. And that's just the beginning. You get to be your own boss, but you also turn into a tax collector for sales tax on your retail products and payroll taxes from your employees' wages.

Corporate Tax

If you choose to incorporate as either an S or C corporation, or form a partnership or limited liability company (LLC), you must file a separate business income tax return: Form 1120, U.S. Corporation Income Tax Return, for a C corporation; Form 1120S for an S corporation; or Form 1065, U.S. Partnership Return of Income, for either a partnership or an LLC. (LLCs are taxed like partnerships.)

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