Tax season can be very stressful, but it is important to remember you are not alone. The word taxes isn’t something people often want to hear, but not only do you have to file your 2018 taxes by April 15th but you also have to pay your estimated quarterly taxes for 2019 by then. Don’t know how to do this? You can count on Corporate Capital to guide you in the right direction to make sure you get your taxes filed and paid before the April 15th due date.
If you are going to miss your tax deadlines, be sure to file an extension, or you will put yourself at risk of penalties by the IRS, owing interest and paying fees. Not to mention, you could potentially miss out on the benefits of a larger refund, better protection from identity thieves, less stress and a better organized financial system.
C Corporations Taxes on Form 1120
In 2018, there were many changes in the tax code, especially with C Corporations. C Corporations went from up to a 35% corporate tax to a flat 21%. Because of this change, we saw more C Corporations formed in 2018 than in 2017. However, corporations are not for all businesses! There are many things to evaluate when considering forming a C Corporation. It is important to work with a professional accounting firm and CPA to minimize “double taxation” in a C Corporation and to make sure it is the best fit for you.
When it comes to a corporation paying their income taxes, they are separate from the shareholders/owners. A corporation pays their income taxes by filing a corporate tax return on Form 1120 and are paid at the corporate income tax rate and not the personal tax rate.
Corporate tax rates are typically lower than individual income rates due to certain tax benefits, but they usually have to file quarterly taxes. Be ahead of the game by taking advantage of certain deductions like charitable donations, rent, employee benefits and compensations for officers.
Personal Tax Returns Using Form 1040
If you need to file your annual income tax return, you will need to fill out Form 1040. It used to be Form 1040-A or Form 1040-EZ, but it was redesigned with some new changes. If your return has some new additions – like certain credits, deductions or additional taxes – you will need to fill out one of the schedules.
Some of these changes concerning your personal tax returns include the following:
-You have additional income (capital gains, unemployment compensation, prize/award money)
-Deductions (student loan interest deduction, educator expenses, self-employment taxes)
-You owe an alternative minimum tax (AMT) or need to make an excess advance premium tax credit repayment
-You can claim a nonrefundable credit other than the child tax credit or the credit for other dependents (foreign tax credit, education credits, general business credit)
-You owe other taxes (self-employment tax, household employment taxes, additional tax on IRAs or other qualified retirement plans and tax-favored accounts)
-You can claim a refundable credit (exempt from earned income credit, American opportunity credit, or additional child tax credit)
-Other payments are owed (i.e., an amount paid with a request for an extension to file or excess social security tax withheld)
-You have a foreign address or a third party designee other than your paid preparer
Your Form 1040 needs to be submitted to the IRS by April 15th unless you applied for an extension, but it’s better to get it done now. Then you won’t suffer any penalties or fees.
If you are looking for guidance this tax season, give Corporate Capital a call at 855-371-0070 to set up a consultation. Our team knows the ins and outs of making sure you are in line with all tax requirements and following the rules. Take the stress off you or your corporation by letting us help you today. We offer bookkeeping, accounting and tax preparation to businesses and individuals in all 50 states, and we are located in Las Vegas, Nevada.