A business must file a state and federal tax return once it is issued an employer ID number by the IRS, regardless of profit, loss or brevity of the taxable period. Filing requirements vary among business, income and expense types.

Organization Types

Companies pay federal income tax on profits and withhold employee income tax to be paid periodically throughout the year. Dividends to shareholders are also taxed. Forms 1120 and 941 are a "C" corporation's primary tax reporting method. "S" corporations do not pay income taxes directly, but rather pass the profits and losses to individual shareholders who report on their personal tax returns using a 1040 form. A limited liability company has partners rather than shareholders, but like an "S" corporation, the profits and losses are taxed on a partner's personal tax filing using a 1065 schedule K-1. Sole proprietors file income tax via form 1040 as income from a business.

Tax Types

Income tax is paid annually, based on an entity's profit or loss and employment. This is achieved by withholding a percentage of periodic income. An alternative to withholding is estimated tax; the estimated income is used to determine periodic payments. If the balance at the end of the year is less than the annual income tax amount, tax due will be paid with the tax return. For the self-employed (sole proprietors and partners), a self-employment tax must be paid to cover Social Security and Medicare coverage. These benefits are covered by employers with employees, as well as unemployment taxes and federal income tax withholdings. Excise tax applies to certain types of businesses presented in IRS Form 720. These include taxes on heavy equipment, air transport and other expenses.

State Taxes

State taxes mirror federal tax structure based on business organization. Specific requirements vary, however. For example, California requires a business to pay for temporary disability insurance, but Arizona does not.

Start-Up Expenses

Per IRS publication 535, a new business may elect to amortize start-up costs over several years, gaining the benefit to lower taxes for years rather than only one. The limit is a $5,000 deduction for 15 years, if total start-up costs are under $50,000. Another $5,000 deduction may be taken in the first year for small-business organizational costs and only applies to an LLC, partnership or corporation.