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Income Tax
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Sole
proprietor files Form 1040, Schedule C, and pays income tax on net profit.
Corporation files form 1120, and pays income tax on net profit; employees
file Form 1040 and pay income tax on salaries received
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501(c)(3)
non-profit files Form 990 or 990-EZ, and pays income tax only on net profit
from unrelated activities; employees of the non-profit file Form 1040 and pay
income tax on salaries received
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Payroll Taxes
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Sole
proprietorship or corporation files quarterly 941's and annual 940, W-2's and
W-3
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Nonprofit
files quarterly 941's and annual W-2's/W-3, but 501(c)(3) organizations don't
pay FUTA tax (Form 940)
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Charitable Contributions
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Grantors and
contributors are not able to take a charitable contribution deduction for
cash or goods donated to an individual or to a for-profit organization
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Grantors and
contributors are permitted to take a charitable contribution deduction for
cash or goods donated to a 501(c)(3) organization
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