Startup Tax Forms: IRS Filing Guide for Startups

Most Common Startup Tax Forms

Corporate income tax & extensions

• Form 1120 – U.S. Corporation Federal Income Tax Return. The primary annual federal income tax return for C‑corporations, used to report your startup’s income, gains, losses, deductions, and credits and calculate tax liability.

  • Schedule K – Other Information. Summarizes key details about your C‑corp, including ownership, accounting method, and certain transactions, to give the IRS more context about your startup’s activities.

  • Schedule L – Balance Sheets per Books. Reports your beginning‑ and end‑of‑year balance sheet, showing assets, liabilities, and equity as recorded in your accounting system.

  • Schedule M‑1 – Reconciliation of Income. Reconciles the difference between your startup’s book income (from financial statements) and taxable income on Form 1120, capturing timing and permanent differences.

  • Schedule M‑2 – Analysis of Unappropriated Retained Earnings. Tracks changes to retained earnings on your balance sheet, including distributions, prior‑period adjustments, and other equity‑related movements.

• Form 7004 – Application for Automatic Extension. Used to request an automatic six‑month extension to file your business income tax return.

Payroll, employees, and contractors

• Form 941 – Employer’s Quarterly Federal Tax Return. Filed every quarter by businesses with employees to report income and payroll taxes withheld, plus Social Security and Medicare payments.
• Form 940 – Employer’s Annual Federal Unemployment (FUTA) Tax Return. Annual FUTA filing; most employers also pay state unemployment tax.
• Form 944 – Employer’s Annual Federal Tax Return. Annual version of Form 941 for very small employers with $1,000 or less in annual liability.
• Form W‑2 – Wage and Tax Statement. Filed for every employee to report wages paid and taxes withheld.
• Form W‑3 – Transmittal of Wage and Tax Statements. Summary of all W‑2 wages and taxes, sent to the IRS and Social Security Administration.
• Form 1099 (NEC, DIV, INT, MISC) – Information Returns. Series of forms documenting payments to non‑employees such as contractors and other businesses; copies go to the payee and the IRS.
• Form 1125‑E – Compensation of Officers. Provides a detailed breakdown of officer compensation so you can substantiate salary and bonus deductions; required when your startup’s total receipts exceed $500,000 and filed with Form 1120.

Startup R&D and business tax credits

• Form 6765 – Credit for Increasing Research Activities. Documents qualified R&D expenses and calculates the federal Research & Development Tax Credit.
• Form 3800 – General Business Credit. Used to claim a variety of business credits, including carryforwards from prior years.
• Form 5884 – Work Opportunity Credit. Allows startups to claim credits for employing people from certain targeted groups (qualified veterans, summer youth employees, former felons, etc.).
• Form 8844 – Empowerment Zone and Renewal Community Employment Credit. Allows eligible employers to claim a credit for wages paid to certain employees who live and work in designated empowerment zones or renewal communities, potentially lowering your tax bill if your operations qualify.
• Form 8941 – Credit for Small Employer Health Insurance Premiums. Allows very small employers (under 25 employees, average salary below $50,000) claim a credit for health insurance premiums, though few high‑salary startups qualify.
• Form 8994 – Employer Credit for Paid Family and Medical Leave. Computes the credit for qualifying paid family and medical leave benefits provided to employees.

Entity setup, fiscal year, and accounting method

• Form SS‑4 – Application for Employer Identification Number (EIN). Used by new businesses to obtain their nine‑digit EIN for tax filing and reporting.
• Form 8832 – Entity Classification Election. Lets companies elect their federal tax classification (for example, corporation vs. partnership).
• Form 1128 – Application To Adopt, Change, or Retain a Tax Year. Used to change your company’s tax year, for example when shifting to a non‑calendar fiscal year.
• Form 3115 – Application for Change in Accounting Method. Required to change from cash to accrual accounting, which Kruze generally recommends for funded startups.

Equity, capital assets, and IP

• Form 3921 – Exercise of an Incentive Stock Option. Reports incentive stock option exercises for employees; one form is required for each ISO exercise.
• Form 4562 – Depreciation & Amortization Deductions. Claims deductions for depreciation and amortization, elects to expense certain property, and reports business use of property and vehicles.
• Form 4797 – Sales of Business Property. Reports the sale or exchange of business property or capital assets.
• Form 8949 – Sales & Other Dispositions of Capital Assets. Reconciles amounts on Forms 1099‑B and 1099‑S with the startup’s tax return.
• Form 8992 – U.S. Shareholder Global Intangible Low‑Taxed Income (GILTI). Used by startups developing significant IP in foreign jurisdictions to report certain overseas income from US‑controlled corporations.

Health insurance and benefits

• Form 1095‑B – Health Coverage. Reports individuals covered under a company’s health insurance to the IRS.
• Form 1095‑C – Employer‑Provided Health Insurance Offer and Coverage. Reports full‑time employees of Applicable Large Employers (ALE) and the health coverage offered.
• Form 8941 – Credit for Small Employer Health Insurance Premiums. Used by businesses with fewer than 25 employees and an average annual salary of less than $50,000 to apply for a tax credit on health insurance premiums. Very limited applicability to typical VC‑backed startups due to salary thresholds.

International and foreign shareholders

• Form 5471 – Information Return of U.S. Persons with Respect to Certain Foreign Corporations. Required for US citizens and residents with certain ownership in foreign corporations.
• Form 5472 – Information Return of a 25% Foreign‑Owned US Corporation or a Foreign Corporation Engaged in a US Trade or Business. Filed by foreign individuals or corporations that own more than 25% of a startup or conduct US trade or business.
• Form W‑8 series – Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals). Group of forms documenting income for any non‑resident aliens your startup pays or employs; very complex and highly fact‑specific.

Home office and other specialized forms

• Form 720 – Quarterly Federal Excise Tax Return. Filed quarterly if your startup owes federal excise taxes on certain goods, services, or activities.
• Form 8829 – Expenses for Business Use of Your Home. Documents home office expenses; the IRS scrutinizes this form closely due to frequent abuse.