Form 1040
The U.S. Individual Income Tax Return. For business owners, investors and landlords, it's the return that pulls every K-1, rental and side business into one picture.
Illustration of Form 1040's layout: page 1, Schedule E and Schedule C. Not the actual IRS form.
Apr 15
filing deadline for most individuals
6 mo.
extension to file, but not to pay
3.8%
net investment income tax for higher earners
25%
maximum late-filing penalty on unpaid tax
Who it's for
Nearly every U.S. citizen and resident with income above the filing threshold files a 1040. SP Tax focuses on the returns where business and investment income make it complex.
Your share of business income, losses and credits flows onto your return, along with basis limits that decide what you can deduct.
Business income and expenses are reported on your own return, along with self-employment tax.
Rental income, depreciation and expenses, plus the passive loss rules that limit when losses count.
Capital gains and losses from stock, real estate and business sales, and the net investment income tax.
Income inclusions and foreign information returns like Form 5471 attach to your 1040.
Why it's complicated
A loss from one business, a gain from another and a rental in between all interact. The order you apply the rules changes the answer.
Business losses pass through basis, at-risk, passive activity and excess business loss limits, one after another. Each can suspend a loss for future years.
The qualified business income deduction can be worth up to 20% of business income, but wage, property and service-business limits apply as income rises.
Sole proprietors and many partners pay both halves of Social Security and Medicare on their earnings, on top of income tax.
Depreciation, repairs versus improvements, and whether your rental losses are passive all shape what you owe.
Capital gain rates, loss carryovers and the 3.8% net investment income tax all depend on how income is classified.
Without withholding, you pay as you go. Underpay during the year and a penalty applies, even if you pay in full by April.
Penalties
Penalties stack on top of tax and interest, and the late-filing penalty is ten times the late-payment penalty.
5%
of unpaid tax for each month a return is late, up to 25%.
0.5%
of unpaid tax for each month it goes unpaid, up to 25%.
20%
accuracy-related penalty on a substantial understatement of tax.
Plus
an underpayment penalty if estimated taxes fall short during the year.
We can catch you up and look at penalty relief options such as first-time abatement or reasonable cause, depending on your history.
Where CPA judgment helps
I look at your 1040 alongside the businesses behind it, so the decisions made there pay off here.
Tracking basis and suspended losses so nothing is deducted too early or lost for good.
Evaluating whether your rentals can offset other income, and what it would take.
Coordinating the deduction across every business you own.
Setting payments that meet the safe harbor, so April has no surprises.
Form 1040 · From $999
Tell me about your situation and I'll send a quote. Final pricing depends on the number of K-1s, businesses and properties.
Become a clientOr email seanpark@sptaxcpa.com