We are experts in the preparation of tax returns for U.S. corporations and foreign corporations that are doing business in the U.S.
Corporate Tax Returns
Did you know that the IRS requires that all corporations file tax returns annually, regardless of whether or not the company was profitable during the tax year? Further, corporate tax returns are needed for businesses who have incorporated as either C-corporations or S-corporations.
C-corporations pay tax on all profits, minus any deductions. On the other hand, S-corporations have the option to choose to be taxed as either as a corporation or as a partnership, where the business is treated as a “pass-through entity”, and the profits are reported directly on the owner’s personal tax return.
Corporate tax returns are typically due on March 15th (for S-corporations) or April 15th (for C-corporations) each year; however, corporations may request an additional six-month extension to file their returns. Additionally, many Corporations may also have to make installment payments (also known as quarterly estimated tax payments) in April, June, September and December. Please note that these are only some of the filing requirements for corporations; therefore, it makes sense to have a professional team on your side to keep you up-to-date with all the required tax filings.
We understand what private investors, venture capitalists, and private equity firms are going to expect your “cap table” to look like, and how important it is that your structure is compliant with U.S. federal and state income tax and sales tax requirements.
We also understand what CFOs and upper management are looking for when it comes to a U.S. corporate tax return. Let us take care of your tax compliance needs so that you can focus on running your company.
What Information Is Reported on Corporate Tax Returns?
Corporate tax returns report the company’s profits and expenses to determine the amount of tax the company owes to the US government. The return consists of several forms that provide information such as the income and expenses, dividends and deductions, officer compensation, details about the accounting method used, business type, NAICS classification number, and balance sheet, among other information.
What Information Do We Need to Prepare Corporate Tax Returns?
The information necessary to file corporate tax returns varies, but generally includes the following:
- Gross receipts or sales
- Cost of goods sold
- Capital gains
- Expenses and deductions
What Expenses Can I Deduct on Corporate Tax Returns?
Fortunately, Corporations are able to claim many tax-deductible expenses against income. The deductible expenses include:
- Officer compensation
- Other salaries
- Repairs and maintenance
- Taxes and licenses
- Interest expenses
- Charitable contributions
- Pensions and profit-sharing plans
- Employee benefit programs
- Domestic production activities
- Other miscellaneous deductions
Special Rules for Foreign Investors
Just because an investor is not a U.S. person and lives outside of the U.S. does not mean there are no filing requirements in the U.S. In fact, Corporations owned by non-US residents must also file corporate tax returns, which may include special forms, such as Form 5472, which carries hefty penalties for an incorrect or delinquent filing. Therefore, non-US residents should seek advice from an international tax expert when opening a business in the US, as well as when filing taxes. Under US tax law, non-residents may own shares in a C-corporation, which may be subject to double taxation of profits at the corporate level and at the personal level, when there are dividends received by shareholders. Alternatively, LLCs will pass on all of the profit to the owner, who will then need to file a personal tax return with the IRS.