Your Complete Corporate Income Tax Guide - Including S Corp
Corporate Tax Forms, Tax Rates, Tax Filing Information
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.
Corporate Tax Rate - and Other New Changes
The 2017 Tax Cuts and Jobs Act has made some changes that affect corporations and S corporations. The biggest change was the elimination of the tax schedule and a new flat corporate income tax rate of 21 percent of corporate net income.
Other changes (both benefits and drawbacks) affecting corporations, detailed in this article about the Trump Tax Cuts, are:
- Increased depreciation expense deductions
- More businesses can use cash accounting
- Lower interest rate deduction for larger businesses
- Meal and entertainment expense deductions limited
- Commuting expense deduction for employers eliminated
- Some business tax credits eliminated, including the Work Opportunity Tax Credit, disability access tax credit, and employer-provided child care credit.
2018 Corporate Tax Return Due Date
The due dates for some corporate federal income tax returns have changed, effective with the 2016 tax year (filed in 2017).
- For corporations with a December 31 year-end, the tax return is due on April 15, 2019.
- For corporations with a fiscal year-end other than December 31, the tax return is due on the 15th day of the 4th month after year-end.
- Extended corporate tax returns are due six months from the date of the original tax return due date, or October 15, 2019, for December 31, 2018, year-end returns.
Getting Help with Corporate Income Taxes
Income taxes for corporations and S corporations are complicated. It's usually best to get the help of a CPA or tax professional who is familiar with corporate taxes, rather than attempting to prepare this return on your own. Before you enlist the help of a CPA, Enrolled Agent, or another 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.
Types of Corporations and Taxes
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 is created first as a corporation and then files to elect S corporation status.
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.
Tax Filing Documents Needed for Corporate and S Corporation Tax Returns
To file your corporation's income taxes, you will need to provide some financial reports and other documents to your tax preparer. These documents include a balance sheet for the beginning of the corporation's fiscal year and the end of that year, a profit and loss statement for the end of the year, information to calculate the cost of goods sold and other documents. Below are the complete lists of information for filing corporation 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
Estimated Taxes, Amended Tax Returns, and Extension Applications
Paying Corporation Estimated Taxes. Corporations must pay estimated taxes if their expected tax bill is $500 or more. Corporations calculate and file estimated taxes on IRS Form 1120-W. The installments generally are due by the 15th day of the 4th, 6th, 9th, and 12th months of the tax year. (For a December 31 corporation that would be April, June, September, and December.)
Where and how to file an amended corporate tax return. Corporations must file an amended corporate tax return on Form 1120x.
Filing an Application for a Corporate Tax Return Extension. Corporations receive an automatic approval on extension applications, but you must still file the application, using Form 7004. The form must be filed by the due date of your corporate tax return and you must pay taxes by this date.
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.