Filing Your Business Income Tax Return: What To Know for 2027

Filing a business tax return means reporting your business income, deductions, credits, and other required tax information for the year. For most calendar-year businesses, returns filed in 2027 cover income and expenses from the 2026 tax year.

The 2025 tax law, Public Law 119-21, commonly known as the One Big Beautiful Bill Act (OBBBA), also appears in IRS materials as the Working Families Tax Cuts. The law made several business tax provisions permanent and changed others that affect returns businesses will file in 2027. Starting early can reduce filing stress and help you identify potential tax-saving opportunities before you file.

This guide covers when businesses have to file taxes, how to file business taxes, which records you may need, and how to avoid common filing mistakes.

What Taxes Are Due for 2026?

For most businesses operating on a calendar year basis, returns filed in 2027 report income and deductions from January 1 through December 31, 2026. Your business structure, or entity type, determines who pays the taxes and how the business reports them when filing business taxes in 2027.

• Pass-Through Entities: Partnerships, S corporations, and most limited liability companies (LLCs) generally do not pay federal income tax at the entity level. Instead, profits and losses flow through to the owners' personal returns.
• C Corporations: C corporations pay federal income tax at the entity level.

Each structure also follows its own filing schedule. Knowing which timeline applies to your business can help you meet the correct business tax deadlines.

When Are Business Income Tax Returns Due for 2026?

If you are wondering when a business needs to file taxes, the answer depends on the entity type and tax year. Knowing when to file business taxes can help you avoid late-filing penalties and interest. Small business tax deadlines vary by entity type:

• Partnerships and S corporations operating on a calendar year generally must file by March 15, 2027.
• C corporations operating on a calendar year generally must file by April 15, 2027.
• Multimember LLCs generally file partnership returns unless they elect another federal tax classification.
• Owners of single-member LLCs generally report business activity on their personal tax returns unless the LLC elects corporate tax treatment.
• Sole proprietors report business income and expenses with their individual tax returns.
• Business owners generally must file their personal 2026 income tax returns by April 15, 2027.

Check your state's requirements for filing business tax returns. Many states follow federal due dates, although state rules vary. Businesses with operations in multiple states may have additional dates to manage.

Hiring remote workers or conducting business in another state, including online business activity, can also create a sufficient business connection, or nexus, that triggers state or local tax obligations.

Can't Meet the 2027 Deadline? File an Extension for Business Taxes

Businesses can generally request an automatic six-month extension to file a federal tax return. An extension gives you more time to file, but it does not give you more time to pay.

Submit the extension request no later than the original filing deadline. Paying as much as you expect to owe by that deadline can help minimize potential late-payment penalties and interest.

Business entities generally use IRS Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns, to request an extension. Individuals, including sole proprietors, self-employed individuals, and owners of single-member LLCs that report their business income on an individual return, generally use IRS Form 4868.

The IRS may also postpone filing and payment deadlines for taxpayers in areas that receive federal disaster declarations. The IRS announces the affected locations, applicable tax relief, and new deadlines for each disaster.

How To File Taxes for a Business

Learning how to file business taxes starts with identifying the return your entity must file, choosing a tax preparation method, gathering your records, and submitting the return by the applicable deadline.

Most businesses e-file their tax returns. Electronic filing can speed processing, reduce certain filing errors, and provide confirmation that the IRS received the return.

Federal rules generally require filers that submit 10 or more specified information returns in aggregate during a calendar year to file those returns electronically, subject to limited exceptions.

Choose Your Tax Preparation Method

Decide who will prepare and file the returns as soon as possible. You can hire a certified public accountant (CPA), enrolled agent (EA), or other qualified tax professional, handle everything in-house, or use tax preparation software for business and personal filings.

The right approach depends on your business, how much time you have, and your comfort with tax rules. Tax software may work for straightforward single-state operations, while multistate employees, entity changes, or complex deductions may warrant professional assistance.

Many owners rely on a CPA or tax preparer to help keep submissions accurate and on schedule. When hiring a professional, verify credentials, ask about experience with small and midsize businesses, and clarify whether you need help filing business tax returns, year-round tax planning, or both.

Consider the Impact of Out-of-State Workers

Out-of-state remote workers generally do not affect federal income tax requirements solely because of where they work, but their locations can complicate state and local income tax requirements.

States commonly use nexus rules to determine whether a business has enough of a connection with the state to trigger tax obligations. A physical business location typically establishes nexus.

Employing workers in another state can also create nexus, which may require the business to file income tax returns or meet other state and local tax obligations.

Your payroll system already tracks where employees work. Use that data to identify states where you may need to review potential filing or reporting obligations. A tax professional can perform a nexus study for your business to determine what multi-state filing requirements your business might be subject to.

Gather Your Tax Records

Your tax return relies on accurate records of your business income and expenses for the year. Keep these records accessible, whether you use a desktop system or cloud-based accounting software, so you and your tax preparer can complete the return efficiently.

Make sure your accounting system clearly tracks payroll information, including wages, compensation, and employment taxes, because those amounts can affect information reported on your business return. Paychex's guide to employer payroll taxes explains the payroll tax filings and records employers commonly manage.

In addition to annual income and expense data, have the following records and other small business tax information available for return preparation:

• Prior-Year Returns: Review past returns for carryovers such as net operating losses, general business credits, or capital losses that may reduce your current tax liability. You can request copies from the IRS if you do not have them.
• Owner Investment Information: Partnerships and S corporations must track each owner's or shareholder's basis to determine the tax treatment of certain losses and distributions. IRS Form 7203 and applicable Schedule K-1 information may factor into these calculations.
• Asset Information: Keep records showing the cost and tax basis of business assets, accumulated depreciation, improvements, and disposition information. You will need this information to calculate depreciation and determine gain or loss when you sell an asset.

Have Supplemental Tax Information Ready

Keep receipts, invoices, canceled checks, and other documents that support your business deductions and credits. You generally do not need to submit this supplemental information with your return, but you should retain it in case the IRS requests supporting documentation.

Tax law requires additional records in some situations:

• Travel, Meals, Vehicles, and Business Gifts: Keep detailed records because receipts alone may not satisfy the substantiation requirements for these expenses. IRS Publication 463 explains the applicable recordkeeping requirements.
• Charitable Giving: Obtain written acknowledgment from the organization for qualifying charitable contributions of $250 or more. IRS Publication 526 explains the federal substantiation rules for charitable contributions. For tax years beginning after December 31, 2025, C corporations also face a new 1% floor on the charitable contribution deduction, along with the existing 10% ceiling.

Consider Post-Year-End Tax Saving Strategies

Even after the calendar year ends, you may still have opportunities to claim certain deductions or make tax elections. Review these areas with your tax professional:

• Maximize Retirement Plan Contributions: Depending on the type of retirement plan and contribution involved, you may have additional time after year-end to make deductible employer contributions. IRS Publication 560 provides information about retirement plans for small businesses.
• Decide How To Write Off Equipment Costs: If your business purchased qualifying equipment or machinery in 2026, review whether Section 179 expensing, bonus depreciation, regular depreciation, or an applicable de minimis safe harbor election provides the appropriate treatment. IRS Publication 946 explains these depreciation rules.
• Review Research and Experimental Costs: Section 174A generally allows businesses to deduct domestic research and experimental expenditures in the year they incur them for tax years beginning after December 31, 2024. Businesses with qualifying research costs should also review whether they qualify for the research credit. IRS Form 6765 covers the credit for increasing research activities.
• Plan Around Tax Law Changes: OBBBA made several business tax provisions permanent and changed others. For example, the law permanently restored 100% bonus depreciation for qualifying property that a taxpayer acquires and places in service after January 19, 2025. Learn more about the business tax provisions under OBBBA, including bonus depreciation and the qualified business income deduction.

When Are Business Taxes Due in 2027?

The 2026 business tax return deadline depends on your business structure. Businesses and owners may also have estimated tax and extension deadlines throughout 2027.

These common federal dates can help calendar-year businesses and owners plan for the year.

Different rules can apply to fiscal-year businesses, taxpayers in disaster areas, and businesses subject to special filing requirements.

Business Tax Changes To Be Mindful of When Filing in 2027

Tax laws continue to change, and businesses filing 2026 returns in 2027 will see the effects of several provisions under OBBBA. The law made several Tax Cuts and Jobs Act provisions permanent and changed other rules governing business deductions and reporting requirements.

Before taking action, speak with your CPA, business tax professional, or legal adviser to determine how these rules apply to your business.

Tax Changes To Know When Filing in 2027

Several provisions affect business returns for the 2026 tax year, although some took effect before 2026:

• Tax Rate Structure: OBBBA made the seven individual income tax rates permanent, with rates ranging from 10% to 37%. These rates affect owners of pass-through entities who report their shares of business income on individual returns.
• QBI Deduction: OBBBA made the 20% qualified business income (QBI) deduction permanent. Beginning with tax years after December 31, 2025, the phase-in range for certain Section 199A limitations is $75,000, or $150,000 for joint filers. The law also provides a $400 minimum deduction for certain taxpayers with at least $1,000 of qualified business income from one or more active qualified trades or businesses.
• Business Interest Deduction Limitation: For tax years beginning after December 31, 2024, businesses can again add back depreciation, amortization, and depletion when calculating adjusted taxable income for purposes of the Section 163(j) limitation.
• Section 179 Expensing Limits: For tax years beginning in 2026, businesses may deduct up to $2.56 million of qualifying Section 179 property. The deduction begins to phase out when qualifying property placed in service during the year exceeds $4.09 million. The Section 179 limit for certain sport utility vehicles is $32,000. IRS Publication 946 provides additional information about Section 179 and depreciation.
• Bonus Depreciation: OBBBA permanently restored 100% bonus depreciation for qualifying property that a taxpayer acquires after January 19, 2025.
• Excess Business Loss Limitation: OBBBA made the excess business loss limitation permanent. For tax years beginning in 2026, the threshold is $256,000, or $512,000 for taxpayers filing jointly. Excess business losses generally become part of a taxpayer's net operating loss carryforward.

Adjustments for Inflation

The IRS adjusts dozens of tax items each year to account for inflation. These adjustments affect tax brackets for individuals and can change what owners of pass-through entities pay on their share of business income. Learn more about how cost-of-living adjustments work.

Other 2026 items that may affect businesses include:

• Standard Mileage Rate for Business Driving: The IRS business standard mileage rate is 72.5 cents per mile for business miles driven from January 1 through June 30, 2026, and 76 cents per mile for business miles driven from July 1 through December 31, 2026.
• Small Business Health Insurance: Inflation adjustments affect certain wage amounts and other limits that businesses use when determining eligibility for the small business health care tax credit.
• Health Savings Account Contributions: For 2026, the Health Savings Account (HSA) contribution limit is $4,400 for self-only coverage and $8,750 for family coverage. Individuals age 55 or older may contribute an additional $1,000 catch-up amount.
• Gross Receipts Test: For tax years beginning in 2026, the Section 448(c) gross receipts threshold is $32 million. The test affects whether certain businesses qualify for specific small-business accounting rules and exceptions.
• Retirement Plan Contributions: The employee elective deferral limit for 401(k), 403(b), and most governmental 457 plans is $24,500 for 2026. Other retirement plan limits also increased for 2026.
• Certain Commercial Buildings: Inflation adjustments affect the Section 179D energy-efficient commercial buildings deduction. OBBBA also terminates the Section 179D deduction for property whose construction begins after June 30, 2026.

Other Reminders

When filing a 2026 business tax return, keep these tax rules in mind:

• E-Filing Requirements: Many businesses must e-file their returns. Businesses may also choose electronic filing when they do not face a mandate because electronic filing generally processes faster than paper filing. As the National Taxpayer Advocate has said, "Paper is the IRS's Kryptonite."
• Clean Vehicle Tax Credits Terminated: The New Clean Vehicle Credit, Previously Owned Clean Vehicle Credit, and Qualified Commercial Clean Vehicle Credit generally do not apply to vehicles acquired after September 30, 2025.
• Form 1099 Reporting Threshold Increased: For certain reportable payments made after December 31, 2025, the federal reporting threshold for Forms 1099-NEC and 1099-MISC increased from $600 to $2,000. Learn more about the differences between Form 1099-NEC and Form 1099-MISC. The threshold will receive inflation adjustments after 2026.
• Form 1099-K Threshold: OBBBA restored the federal Form 1099-K threshold for third-party settlement organizations to more than $20,000 in payments and more than 200 transactions. A payment platform may still send you Form 1099-K below those thresholds in some circumstances.
• Estimated Taxes for 2027: An extension to file your 2026 return does not extend the deadline for paying 2027 estimated taxes. Pay any balance due for 2026 and your 2027 estimated tax payments separately.

Key Tax Planning Strategies for 2026/2027

Tax planning involves more than filing on time. Year-round organization can make filing business taxes more efficient and help you address potential tax issues before deadlines arrive.

In addition to the post-year-end strategies discussed above, consider these areas as part of your ongoing tax planning:

• Plan Income and Expenses: Talk with your CPA about the timing of income, deductions, investments, and other significant business expenses.
• Track Credits Early: Identify tax credits that may apply to your business early enough to maintain the records you will need to support them.
• Stay Organized With Payroll and Benefits: Keep payroll tax deposits, benefits contributions, estimated payments, and accounting records aligned throughout the year to reduce surprises during tax season.

Tax complexity often grows with your business. Working with experienced business tax professionals and maintaining organized payroll and tax records can help you manage filing requirements and identify available tax-saving opportunities. Paychex's small business trends resource offers additional planning context for business owners.

Common Business Tax Mistakes To Avoid

Businesses can prevent many expensive tax mistakes by maintaining accurate records, making timely payments, and reviewing their tax obligations regularly.

• Missing Quarterly Estimated Taxes: Quarterly estimated taxes can catch business owners off guard, especially when revenue increases. The IRS generally expects taxpayers to pay taxes as they earn income, and underpayments can trigger penalties and interest. Review your actual income and expenses with your accountant each quarter rather than relying only on last year's estimates. Learn more about quarterly estimated taxes and when businesses may need to make payments.
• Mixing Personal and Business Expenses: Mixing personal and business expenses can make recordkeeping more difficult and create questions about deductions. Consider maintaining dedicated business accounts and using accounting software that imports transactions. A tax calendar can also help you track when business taxes are due.
• Misclassifying Workers: Worker classification affects payroll taxes and other employment obligations. Review the applicable IRS classification rules and maintain documentation that supports how your business classifies workers.

Entity-Specific Filing Requirements and Thresholds

Requirements for filing business taxes depend on how your business is structured. Your entity type determines the federal return you file, how the business reports income, and which filing deadline applies. Learn more about how different business structures compare, including sole proprietorships, LLCs, S corporations, and C corporations.

Eligible LLCs may elect corporate tax treatment, which changes their federal filing requirements. Paychex's Form 8832 guide explains how eligible entities can elect a different federal tax classification.