Corporate Tax
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S Corporation Tax Services
Even if we prepare your S Corporation income tax return, the S Corporation generally does not pay taxes as profits flow through to the shareholders. Pass-through items from S Corporation tax return keep their same character to the shareholder as they did to the corporation. Shareholders who perform services are paid as employees and income is reported on a W2.
- When filing S Corporation income tax return it is critical to keep in mind the concept of reasonable compensation which is a recent common IRS tax audit issue. S Corporation tax return also has an opportunity for the shareholder to qualify for a 20% qualified business income deduction as other pass through business entities may have.
- As in all business entity formation for an S Corporation, it is also important to consider all variables prior to forming an S-Corporation. Consider the fact that an S Corporation is in fact requiring a separate S Corporation tax return. An S Corporation may be complex and expensive to create and maintain, therefore the benefits must be greater than the cost. We can analyze all of this for your business and prepare an S corporation income tax return with highest tax benefits for various situations.
- In addition to S Corporation tax return we can help businesses with regular board of directors meetings and minutes. When we prepare your S Corporation income tax return, we ensure that we accurately keep track of basis for all shareholders. We structure an S Corporation tax return legally to provide the flexibility and increase the deductibility of fringe benefits for owner-employees.
C Corporation Tax Services:
Corporate tax returns for C Corporations are separate tax return on form 1120 U.S. Corporation Income Tax Return. While preparing a federal corporate income tax return we are always mindful of reasonable wages that must be paid and not inflated to reduce corporate tax liability.
- From corporate tax return shareholders who perform services get paid as W2 employees and are subject to payroll tax as well as reporting rules. Unlike S Corporation income tax return the corporate tax return on form 1120 subjects to tax on net profits, this creates the double taxation of a C Corporation because profits that get distributed to shareholders as dividends are taxed again to the shareholder.
- At Business Taxes and More we take a complete look at your business if it makes financial sense for your business the profits to shareholders may be deferred as retained earnings for business purposes such as investment and expansion of your business. We might recommend C Corporation and the opportunity for federal corporate tax return if your corporate tax return benefits are greater than the complexity and expensive cost to maintain a C Corporation.
- Many businesses still benefit from the status of a C Corporation because while filing a corporate tax return might be complicated, we can take the complexity out of your hands as experts for corporate tax return preparation. Your business may greatly take advantage of being a C Corporation if it will be in businesses with ownership in multiple other entities.
- The federal corporate tax return and this entity type is beneficial to businesses with significant exposure to liability. Corporate tax returns are for businesses that are intended to exist eternally.
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- Business Set-up and Structure
- Accounting & Bookkeeping
- Tax Planning
- Business Consulting and Advice
- Payroll Services
- Financial Reporting
- Audit Support
- Business Succession Planning
- Risk Management
Frequently Asked Questions
Does an S Corp need to file a tax return?
Yes. An S Corporation must file an S corporation tax return (Form 1120S) with the IRS each year, even though profits and losses pass through to shareholders. Filing ensures your business is compliant and shareholders receive accurate income reporting.
Benefit: By working with Sean Simonyan at Business Taxes and More, you gain Exceptional Tax Services that guarantee accuracy, minimize errors, and protect your business from costly penalties.
How does S Corp income get taxed?
S Corp income flows through to shareholders and is reported on their personal tax returns. The corporation itself typically does not pay federal income tax, though some states may have entity-level taxes. For example, the state of California with its love for regulation and taxes even to the smallest of the businesses has a minimum tax of $800 even if the corporation had a loss. That’s right, you read it correctly.
Benefit: Using professional services ensures that all deductions, credits, and income allocations are correct, reducing your overall tax burden. Business Taxes and More helps you optimize your S corporation income tax return while maintaining full IRS compliance.
Can I prepare my own S Corp tax return?
Technically, you can, but IRS rules are complex. Mistakes on shareholder distributions, payroll, or deductions are common and could cost you thousands of dollars if not your future earnings and your assets such as your bank account or sometimes your home.
What must you do when you have an S Corp?
Operating an S Corp involves:
- Maintaining corporate records and minutes
- Issuing K-1s to shareholders
- Paying reasonable owner salaries
- Tracking business income and expenses
Benefit: Staying compliant protects your liability status and ensures your S corporation tax return is precise. With Business Taxes and More, this process becomes straightforward, letting you focus on growing your business.
What tax return is filed for an S Corp?
S Corps file Form 1120S, which reports income, deductions, and shareholder distributions. Shareholders receive Schedule K-1s for personal filings.
Can I file my own S Corp tax return?
Yes, but navigating IRS rules is tricky. Errors in K-1s, payroll, or expense reporting can trigger audits or missed deductions.
Benefit: Hiring Business Taxes and More ensures accurate filing and peace of mind. Our Exceptional Tax Services protect your business while optimizing shareholder income.
What is the difference between 1120 and 1120S?
Form 1120 is for C Corporations, which pay corporate income tax directly. Form 1120S is for S Corporations, where income flows through to shareholders.
Benefit & CTA: Choosing the correct form is crucial to avoid penalties. Sean Simonyan at Business Taxes and More can help ensure your federal corporate tax return is filed correctly, giving you confidence and compliance. We help you switch back and forth within each form where allowed in order to maximize your tax savings under different outcomes. This is just one of the many proactive tax strategies that Business Taxes and More provides to its clients who file business tax returns with them.
How do I file taxes with an S Corp?
Filing involves:
- Gathering income, expense, and payroll records
- Preparing Form 1120S and Schedule K-1s
- Submitting federal and state returns on time
Benefit: With Business Taxes and More, filing becomes easy and error-free. Our team ensures your S corporation tax return is accurate and maximizes available deductions, letting you focus on running your business.
What is a corporate tax return?
A corporate tax return reports a company’s financial activity, including income, deductions, and shareholder allocations. For S Corps, this is Form 1120S; for C Corps, Form 1120.
Benefit: Proper filing reduces audit risk, protects shareholders, and ensures compliance. Business Taxes and More provides professional guidance to keep your corporate tax returns precise and on time.
Is Form 1120 for C Corp or S Corp?
Form 1120 is for C Corporations, while S Corps use Form 1120S. Filing the correct form is critical to avoid IRS errors and penalties.
Ensure compliance and accuracy contact Sean Simonyan at Business Taxes and More for professional preparation of your federal corporate income tax return.
When must a corporate tax return be filed?
Corporate tax returns are generally due on the 15th day of the third month after the fiscal year ends. For calendar-year S Corps, this is March 15. Extensions are possible with proper filing.
Benefit: Timely filing avoids penalties and interest. Business Taxes and More ensures deadlines are met while optimizing your S corporation tax return for maximum benefit.
Who needs to submit a corporation tax return?
Any corporation S Corp or C Corp with shareholders, income, or business activity must submit a corporate tax return, even if no tax is due.
Benefit: Filing correctly protects your corporate status. With Exceptional Tax Services from Sean Simonyan at Business Taxes and More, your returns are accurate, compliant, and strategically prepared.
How does a corporate tax return work?
A corporate tax return summarizes financial activity, reporting income, deductions, credits, and shareholder allocations. S Corps pass income through to shareholders for personal reporting.
Filing with expert guidance ensures correct reporting and reduces tax liability. Business Taxes and More can handle your S corporation income tax return professionally, letting you focus on growing your business.
Should I be taxed as an S Corp or a C Corp?
S Corps offer pass-through taxation, potentially reducing self-employment taxes. C Corps may benefit businesses reinvesting profits or seeking certain fringe benefits.
Determining the right structure can save thousands. Consult Sean Simonyan at Business Taxes and More to evaluate your business and choose the most tax-efficient path.
Can an S Corp help me save on taxes compared to other structures?
Yes. Properly structured S Corps reduce self-employment taxes and leverage business deductions. Accurate S corporation income tax return preparation ensures these benefits are applied legally.
Protect your profits and stay compliant by contacting Business Taxes and More today for Exceptional Tax Services tailored to your business.