What your business owes depends on how it is structured
How your business is set up decides which return you file. A sole proprietor or single-member LLC reports business income on Schedule C, attached to the owner's personal Form 1040. There is no separate business return. A partnership or multi-member LLC files Form 1065. An S corporation files Form 1120-S. Both are pass-through entities, meaning the business itself generally pays no federal income tax. Instead it issues each owner a Schedule K-1 reporting that owner's share of the profit, and the owner pays the tax on their personal return. A C corporation is different. It files Form 1120 and pays tax at the corporate level.
Partnership and S corporation returns are due in March, ahead of individual returns, because owners need their K-1s before they can file personally. A late 1065 or 1120-S carries a penalty charged per owner, per month, which adds up quickly even when the business owes no tax at all.
Alongside the return sits the bookkeeping. Clean books are what make an accurate return possible. We keep the books and prepare the return, so the numbers trace back to real records.
Payroll tax is the one that turns into a real problem
If you have employees, this section matters most. Payroll tax is the single most common way a small business ends up needing tax resolution.
Here is why. When you run payroll, you withhold income tax, Social Security, and Medicare from your employees' wages. That withheld money is not yours. The IRS calls it trust fund tax, because you are holding it in trust for your employees, who already got credit for it. You report it quarterly on Form 941 and send it to the IRS on a deposit schedule, either semi-weekly or monthly depending on your size. Those deposits are due whether or not the business had a good month.
Cash gets tight, a client pays late, and the payroll deposit is the money sitting in the account. It is an easy loan to take from yourself, and it almost never gets paid back before the next payroll. This is not a story about bad people. It is the most common story we see.
The part owners do not expect is the Trust Fund Recovery Penalty. Under Internal Revenue Code section 6672, the IRS can assess the unpaid trust fund portion personally against any responsible person who willfully failed to pay it. Responsible means someone with authority over which bills get paid, which can include owners, officers, and bookkeepers. Willful means you knew and paid someone else first. The corporation or LLC does not shield you from it, and the assessment survives the business closing. The IRS pursues payroll tax harder than almost anything else, because the money was never the company's to spend.
If you are behind on payroll deposits right now, tell us today rather than next quarter. The gap is smaller and the options are better the earlier it is addressed.
How AmeriClear handles it
We work the compliance calendar with you instead of appearing once a year. Bookkeeping stays current, quarterly Form 941 filings and deposits go out on schedule, and the annual return gets prepared from books that are already reconciled. When the deadline arrives, there is no scramble.
Our Enrolled Agents and tax professionals handle the returns and the filings, and if there is already an IRS balance, the same team works the resolution side. We do bookkeeping and tax work only. We do not perform audits, reviews, or other assurance services on financial statements, and we will say so plainly when you need a service we do not provide.
You get a direct case contact who knows your business, not a call center queue. And we quote a flat fee before you commit.
What to expect
We start with your entity type, filing history, and payroll setup. If prior years are unfiled or payroll deposits are behind, we deal with that first, because nothing else can be fixed on top of it. Filed returns are a precondition for nearly every IRS payment option.
Expect us to ask about reasonable compensation if you run an S corporation. Owners who work in the business are required to pay themselves a reasonable wage through payroll before taking distributions. Paying yourself entirely in distributions to avoid payroll tax is a well-known audit trigger, and we will not set you up that way.
Also expect a real conversation about your monthly numbers. Payroll deposits, estimated payments, and sales tax if your state requires it are all money that belongs to someone else and needs to be separated before it gets spent. Owners who keep that money in a separate account almost never end up in our resolution department.
That is the point of this work. Resolution clears the past. Staying filed, deposited, and current is what keeps you in good standing so the problem does not come back.