Corporate Tax Returns, it is the requirement that all corporations file their tax returns every year whether or not a company makes profits. Form 1120 is filled up by businesses that are either registered as C-corporations or S-corporations. These options are preferred by most entities since the tax paid is borne by the company and not the owner. While C-corporations are taxed based on their profitability, S-corporations on the other hand may option to taxed either as partnerships in which case profits are passed on to the partners. In the latter case, individual partners choose to file personal tax returns. Ordinarily, corporate tax returns are supposed to be filed by March 15th every year. However, where there is a need, a company may apply for an extension of up to six months.
Who Should File Corporate Tax Online?
Any corporation that records more than $10 million in assets is supposed to file its annual returns online. But physical paperwork should as well be filed electronically. As a corporate entity, you will need to make installment payments in April, June, September, and December.
What Information Should be Included When Filing Corporate Tax Returns?
Corporate tax returns are a reflection of a company’s profitability and expenditure and are an indicator of how much a company owes in tax. Several schedules are accompanied to help provide details of the returns. They include the method of accounting used, type of the entity, statement of financial position, statement of reconciliation of income and loss as well as the classification number.
Documents Necessary for Filing Corporate Tax Returns, you will need to provide the name, address, date of incorporation, and the total assets. Your accountant will also need to furnish the authorities with details regarding incomes. They will include:
• Gross receipts
• Cost of sales
• Capital gains
Are there Deductible Expenses?
Like personal tax, companies filing corporate tax returns can also apply or claim tax-deductible expenses. Your accountant can help list and track all the qualifying deductibles and supply the same information in case an audit is to be conducted. Some of the deductible expenses include:
• Repairs and maintenance
• Officer compensation
• Taxes and licenses
• Interest expense
• Contributions towards charity
• Pension plans
• Employee benefit plans
How About Corporations Owned by Foreigners?
Like locals, foreign-owned corporations are also expected to file corporate returns. It is a good idea to ask for advice from a tax expert when starting a company in the U.S and when filing taxes. As per the federal law, non-U.S residents may own shares in corporations classified as “C” in which case double taxation at company level and individual level may apply. Alternatively, limited liability companies (LLCs) may pass on all returns on investments to the owners who will be required to file personal tax returns as per the guidelines of the IRS.