BEST WAY TO REPORT INCOME FROM A SMALL BUSINESS

[rickeyfrazier]

BEST WAY TO REPORT INCOME FROM A SMALL BUSINESS

[tagteam]

Please be more specific.

What type of business and how is it organized? As a sole proprietorship, S corporation, LLC/partnership?

The structure makes a difference.

[evelynm]

For your small business be sure to have all records relating to your business earnings and expenses.  If you are a sole proprietorship or use a legal entity such as an LLC or corporation you generally calculate your taxable business income in similar ways.   Start by reporting gross receipts or sales for the year along with your business expenses.

The following resources provide further details:

https://turbotax.intuit.com/tax-tips/small-business-taxes/how-to-file-federal-income-taxes-for-small...

https://turbotax.intuit.com/tax-tips/self-employment-taxes/reporting-self-employment-business-income...

[rickeyfrazier]

It's an LLP and I have 3 private contractors working as consultants in Europe. 

I guess my true questions is should I file as a business or add the income to my annual income and file it as my total annual income amount.  

[evelynm]

Yes you will file a business (Partnership tax return).  Partnerships headquartered in the United States must file Form 1065 each year, including limited partnerships.    Partnerships generally don’t pay taxes and use Form 1065 to prepare Schedule K-1s to pass-through income and losses to partners - which will be reported on your individual tax return.

Further details are in the link below:

https://turbotax.intuit.com/tax-tips/irs-tax-forms/what-is-form-1065/L5UpOREHb##