U.S. Corporations and Income Taxes
This guide will take you through the top pieces of information to help you prepare for corporate taxes, including types of corporations and how they are taxed, when and where to file, which form to use, and estimating corporate taxes.U.S. corporations are complex entities and taxes for corporations are even more complex. Before you enlist the help of a CPA, Enrolled Agent, or other qualified tax preparer to prepare your corporation's taxes, there is some basic information about corporation taxes you should know. Read more about Getting Help with Business Taxes.
2012 Corporate Tax Return Due Date
The due date for 2012 (December 31 year-end) corporate and all S corporation tax returns: March 15, 2013
Corporations (not S corporations) may choose any convenient date as their fiscal (financial) year end; most corporations choose a quarter end date. Corporation tax returns are due and taxes are payable on the 15th day of the third month after the end of the company's fiscal year. So, a corporation with a year-end date of December 31 must file and pay taxes by March 15; a corporation with a year-end date of September 30 must file and pay taxes by December 15. S corporations must select a December 31 year-end.
Types of Corporations
In the U.S., there are two basic types of corporations - C corporations (usually just called "corporations") and S corporations (for the section of the Internal Revenue Code that applies to this business type). Both types have the same basic structure, using Articles of Incorporation to incorporate within a specific state or states. Both types of corporations have corporate by-laws and a corporate board of directors. An S corporation forms as a corporation then at some point files an .
The difference between a corporation and an S corporation comes in the way they are taxed. Read more about corporations and s corporations to be sure you understand the differences.
Corporation vs. S Corporation Tax Forms
Corporations file their federal income tax returns using Form 1120; S corporations file using Form 1120S. Here are IRS copies (i PDF) of Form 1120 and Form 1120S, and instructions for Form 1120 and Instructions for Form 1120S. In addition to Form 1120S, S corporation shareholders report their share of corporate income or loss on a Schedule K-1 - Shareholder's Share of Income, Deductions, Credits, etc.
Corporate Tax Rate
The corporate federal income tax rate is effectively 35%, but the rate varies from 15% to 35%, depending on the amount of income being taxed. Read this article on the corporate tax rate to see the corporate tax rate schedule and an example of how to compute your corporate taxes using the schedule.
Tax Filing Documents Needed for Corporate and S Corporation Tax Returns
- Documents needed to give to your tax preparer to file your corporation's tax return.
- Documents needed to give to your tax preparer to file S corporation tax returns
S corporations are taxed on individual income tax returns. So an S corporation must usually take a calendar year end date (December 31) to coincide with the personal tax year end, unless the corporation can establish a reasonable business purpose for a different date. The filing date and tax return due date are the 15th day of the 3rd month after the tax year end: March 15 for almost all S corporations.
Where and How to File Corporate Income Taxes
You can file your corporate tax return by mail or you can have your tax preparer e-file the return. Here are the addresses to use when filing your corporate tax return by mail:
State Corporate Taxes
You must also pay income taxes in the state or states where your business is incorporated, if those states have corporate taxes. To find out more about your state's corporate tax rates and filing instructions, go to the website of your state tax authority - state department of revenue or similar department.