Business Taxes

1120 Corporation Income Tax Return

Purpose of Form
Form 1120, U.S. Corporation Income Tax Return is used to report the income, gains, losses, deductions, credits, and to figure the income tax liability of a corporation.

Who Must File
All domestic corporations (including corporations in bankruptcy) must file an income tax return whether or not they have taxable income. Domestic corporations must file Form 1120 unless they are required to file a special return.

1120 S US Corporation Income Tax Return

Purpose of Form

Form 1120S is used to report the income, gains, losses, deductions, credits, etc. of a domestic corporation or other entity for any tax year covered by an election to be an S corporation

Who Must File

A corporation or other entity must file Form 1120S if:

    • it elected to be an S corporation by filing Form 2553
    • the IRS accepted the election, and
    • the election remains in effect.

1065 Partnership Income Tax Return

Form 1065 is an information return used to report the income, gains, losses, deductions, credits, etc., from the operations of a partnership. A partnership does not pay tax on its income but “passes through” any profits or losses to its partners. Partners must include partnership items on their tax returns.

A partnership is the relationship between two or more persons who join to carry on a trade or business, with each person contributing money, property, labor, or skill and each expecting to share in the profits losses of the business whether or not a formal partnership agreement is made.

The term “partnership” includes a limited partnership, syndicate, group, pool, joint venture, or other unincorporated organization, through or by which any business, financial operation, or venture is carried on, that is not, within the meaning of the regulations under section 7701, a corporation, trust, estate, or sole proprietorship.

990 Return of Organization Exempt From Income Tax

Organizations exempt from income tax under Internal Revenue Code section 501(a), which includes sections 501(c), 501(e), 501(f), 501(k), 501(n), 501(a)(1) must generally file Form 990 of Form 990-EZ based on their gross receipts for the tax year. (See General Instruction B next for exceptions to the filing requirement.) For this purpose, gross receipts is the organization’s total revenues from all sources during its annual accounting period, without subtracting any costs or expenses.

However, in addition to the above filing test, 501(c)(15) insurance companies are subject to a separate series of tests to determine whether small insurance companies qualify as tax exempt under section 501(c)(15) for the tax year. These separate tests use a different definition for gross receipts only for purposes of determining whether such insurance companies qualify as tax exempt. See section 501(c) (15) Organizations below for additional information.

Purpose of Form
Form 990 and Form 990-EZ are used by tax-exempt organizations, nonexempt charitable trusts, and section 527 political organizations to provide the IRS with the information required by section 6033

Some members of the public rely on Form 990, or Form 990-EZ, as the primary or sole source of information about a particular organization. How the public perceives an organization in such cases may be determined by the information presented on its return. Therefore, the return must be complete, accurate, and fully describe the organization’s programs and accomplishments.

Estimated Taxes

Estimated tax is the method used to pay tax on income that is not subject to withholding. This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes and awards. You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough.

Estimated tax is also used to pay both income tax and self-employment tax, as well as other taxes and amounts reported on your tax return. If you do not pay enough through withholding or estimated tax payments, you may be charged a penalty. If you do not pay enough by the due date of each payment period you may be charged a penalty even if you are due a refund when you file your tax return.

Who Must Pay Estimated Tax
If you had a tax liability for 2013, you may have to pay estimated tax for 2014.

General Rule
You must pay estimated tax for 2014 if both of the following apply.

    • You expect to owe at least $1000 in tax for 2014 after subtracting your withholding and credits.
    • You expect your withholding and credits to be less than the smaller of;
      • 90% of the tax to be shown of your 2014 tax return, or
      • 100% of the taxes shown on your 2013 tax return. Your 2013 tax return must cover all 12 months.

Sole proprietors, partners, and S corporation shareholders generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return.

Corporations generally have to make estimated tax payments for your corporation if you expect to owe tax of $500 or more when you file its return.