Corporate Tax Filing
Navigating the intricacies of IRS compliance with a team of proficient corporate tax accountants by your side ensures your corporate tax filing needs are met with precision.
Hire an Expert CPA for Your Corporate Tax Filing Needs
At TMP, our tax and accounting experts possess a deep understanding of the complexities inherent in United States federal and state corporate tax laws and regulations. We are dedicated to leveraging this knowledge to benefit our clients through compliance, strategic tax planning, shedding light on potential tax incentives within the U.S. Internal Revenue Code.
In navigating the intricate landscape of U.S. corporate taxation, we commit to providing insightful guidance and proactive solutions. Our team ensures that your business remains compliant with the ever-evolving tax regulations in the United States.
Determine Corporate Fiscal Year End
Bookkeeping Finished Accurately and Completely
Review Trial Balance
Discuss Key Points with Management
Create Adjusting and Closing Entries
Determine Required Corporate Tax Schedules
Fill in the Appropriate Schedules and Financial Info
Final Review With Management
Submit Electronically to IRS
Who Must File a Corporate Income Tax Return?
All domestic corporations must file an income tax return (Form 1120) whether or not they have taxable income. This includes
Active
C-corporations
Inactive
C-corporations
Limited liability companies electing to be taxed as a corporation
Corporations
engaged in farming
How Much Are Corporations Taxed in the U.S.?
Corporations in the U.S. are subject to a federal corporate income tax rate of 21%.
- Most states impose additional corporate income taxes, which vary widely.
- Some states levy franchise taxes or gross receipts taxes instead of, or in addition to, corporate income tax.
- Rates and structures depend on the state in which the corporation operates.
Navigating these layers of taxation requires careful planning to ensure compliance and optimize tax outcomes.
Which U.S. States Have No Corporate Income Tax?
- Certain states offer relief from traditional corporate income taxes:
- South Dakota
- Wyoming
- Nevada
- Washington
- However, some of these states may impose alternative taxes:
- Franchise Taxes: A fee for the privilege of doing business in the state.
- Gross Receipts Taxes: Taxes on total revenue, regardless of profitability.
- Choosing the right state for incorporation requires understanding these nuances to balance tax efficiency and business needs.
Business Entity Choice
S Corporation
An S corporation is a pass-through entity. It has to file Form 1120-S at year-end but generally does not pay tax. It also issues K-1 slips to the shareholders to report their share of corporate income passed through. There are eligibility criteria that must be met in order to form an S corporation.
C Corporation
A C Corporation is a separate entity for income tax purposes. It files Form 1120 to report income and pay tax. Shareholders are not taxed on corporate income until distributed.
Limited Liability Company (LLC)
Each form of business entity is associated with different income tax filing requirements and legal liability considerations.
Business Entity Choice
C Corporation
S Corporation
Limited Liability
Company (LLC)
Each form of business entity is associated with different income tax filing requirements and legal liability considerations.
Services We Offer as Corporate Tax Preparers
Why Us
Educating Clients
We focus on empowering our clients with the financial knowledge and resources needed to make informed decisions and achieve long-term success.
Seasoned Experts
Our team of experienced professionals brings extensive expertise in accounting and tax regulations, delivering reliable and thorough solutions tailored to your needs.
Personalized Solutions
We customize our services to fit the unique financial circumstances and goals of each client, offering targeted solutions that effectively address their challenges.
Modern Approach
Leveraging the latest technologies and innovative strategies, we deliver efficient, forward-thinking accounting and tax services designed to meet the evolving demands of businesses and individuals.
Frequently Asked Questions (FAQs)
Find answers to common questions about Democracy
Form 1120, the U.S. Corporation Income Tax Return, is generally due on the 15th day of the fourth month following the end of a corporation’s tax year. For corporations operating on a calendar year basis, this means the return is due by April 15. The corporation can request a 6-month extension by filing Form 7004.
The penalty for filing Form 1120 after the due date (including extensions) is 5% of the unpaid tax for each month (or part of a month) the return is late, up to a maximum of 25% of the unpaid tax.
The C-corporation has to pay any corporate tax owed by the tax return due date of Form 1120. If the corporation filed Form 7004 to extend the return due date, it must still pay the tax owed by the original return due date.
Every corporate tax return is unique so there are variations in the amount of documentation we require. Generally, we require a copy of your articles of incorporation, financial statements and past returns to begin with.
To qualify for S corporation status, the corporation must be a domestic corporation. The shareholders cannot be partnerships, corporations or non-resident alien individuals. The corporation can only have one class of stock and has no more than 100 shareholders.
Since a C corporation is a separate tax-paying entity. The business income is taxed at the corporate level at flat rate of 21% (federal). You do not pay tax on the business income until it is distributed to you. It is more tax-advantageous to operate a C corporation if your average personal tax rate is at a higher rate or you prioritize reinvesting the business earnings into the business operations.
There are legal considerations to be made when choosing which business entity to establish.
LLC – generally limits the liability to the assets owned by the LLC; if the business assets are depleted, the member(s) is not held personally liable for the remaining business claims
C corporation – generally limits the liability to the assets owned by the C corporation
S corporation – generally limits the liability to the assets owned by the S corporation
No, you do not have to accept the default federal tax classification. A single-member LLC can elect to be treated as a corporation instead of as a disregarded entity. A multi-member LLC can also elect to be treated as a corporation instead of as a partnership. To change the classification, Form 8832 is used.
Delaware is widely regarded as the best state to incorporate due to its business-friendly legal system, well-established corporate laws, and the specialized Court of Chancery. It is particularly advantageous for large corporations and businesses seeking legal predictability. However, for small businesses, incorporating in the state where the business operates may be more cost-effective.
Wyoming is often considered the best state to start an LLC due to its low fees, no income taxes, strong privacy protections, and minimal compliance requirements. Other popular states include Nevada and Delaware, though the choice may depend on where the LLC operates.
Wyoming, South Dakota, and Nevada are often considered the most tax-friendly states due to their lack of corporate and personal income taxes, business-friendly regulations, and low compliance costs.
As of November 2024, the US federal income tax rate is a flat 21% on taxable income. In addition to federal tax, many states collect their own corporate income taxes. The state income tax rate can range from 0% to 10%, depending on the jurisdiction.
How much will it cost for TMP to calculate my cryptocurrency gain and loss?
Basic Package
Corporate Activity:
No income, expenses, or business operations.
Employees:
No employees.
Income Types:
No business or passive income.
State Nexus:
Filing in one state only.
Expert Package
Corporate Activity:
Active business operations with up to 7 employees.
Income Types:
Business income only (no or minimal passive investment income).
State Nexus:
Income nexus in up to 2 states.
Premium Package
Corporate Activity:
Active business operations with up to 15 employees.
Income Types:
Business income plus passive investment income.
State Nexus:
Income nexus in up to 5 states.
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