A corporate tax return is a detailed report of a company’s profits and expenses, determining the aggregate amount of tax a company owes to the US government. As per the US IRS, all business organizations must file tax returns annually regardless of whether or not the company was profitable during the particular tax year. A typical corporate tax return stands due on 15th March every year. However, businesses can request a six months extension if needed. All companies recording assets of more than $10 million are necessarily required to file an online return.
Many entrepreneurs choose to follow the legal structure as it is profitable for the businesses to pay taxes on profits rather than to the owner. The C-level corporations pay taxes on accumulated gains minus deductions. In contrast, the S-level corporations can choose to be taxed as an organization or a partnership (where business is treated as a pass-through entity). Here, the profits are passed to the owner to levy tax collection on his personal tax returns.
What information is recorded in a corporate tax return?
A corporate tax return comprises various schedules containing comprehensive information of accounts and finance, including the dividends, deductions, costs of goods sold, and officer compensations. It also includes details such as accounting methods used, NAICS classification number, business type, balance sheets, and the reconciliation statement of income and loss.
What information and documents are necessary for corporate tax returns?
A corporate tax return mandatorily requires you to include the name, address, date of incorporation, employer ID number, and total assets. However, the corporate financial officer will necessarily need to send the details about the corporate income:
- Cost of goods sold
- Gross receipts
- Rents
- Royalties
- Dividends
- Capital gains
What expenses can you deduct on your corporate tax return?
Businesses can claim several tax-deductible expenses against the earned income. The financial officers of your company will be required to maintain and track these details throughout the year in order to provide complete documentation in case of an audit. These deductible expenses include the following:
- Repairs and maintenance
- Rents and depreciation
- Advertising
- Taxes and licenses
- Interest expenses
- Officer compensation
- Charitable contributions
- Domestic production activities
- Pensions and profit-sharing plans
- Employee benefit programs
- Other salaries
- Other miscellaneous deductions
Rules for foreign investors
Businesses owned by non-US residents must file corporate returns. However, if you are a non-resident, it is advisable to seek consultation from an international tax professional both during the commencement of your business in the US and while filing the tax return. This will allow you to gain better clarity regarding the US tax laws regarding your roles and responsibilities as a tax-paying entity.
About us
If you need assistance to file your first ITR, CTR or wish to enjoy various perks apart from managing accounts and ascertaining profit, Florida Global Consultants is your one-stop destination for tax consultancy services. We are a professional and trustworthy company involved in business taxation, accounting, and consulting services. We are top-rated amongst our clients and hold an excellent reputation and experience in the industry. For more information about us, contact us at (786) 456-5140, connect through email at [email protected] or fill the contact form.
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