QUESTION:

I've come to the end of the first quarter of my new business. What tax forms do I need to fill out? I don't have any employees other than myself and I have only taken a small cash withdrawal so far, no wages.

ANSWER:

From your description of your business, it sounds like you are operating as a sole proprietor. As far as the IRS is concerned, your business does not have to file any forms now since you have no employees. Of course, when you prepare your personal income tax return -- the one due in April -- you must report your business profit or loss on Schedule 1040C and add it to or subtract it from your other income.

But there is another taxing matter you should know: You need to pay enough income tax during the year to cover your personal income tax bill. This includes income tax and the self-employment tax -- basically, Social Security and Medicare. So file your quarterly estimated tax returns (using IRS Form 1040-ES and your state's form, if any) and pay these taxes in advance. If you don't pay enough in advance, the IRS can hit you with a bill for interest and painful penalties, come April.