Corporate Tax Time Is Here
When you are a C corporation in the U.S. and your fiscal year is the same as the calendar year, March 15 is your deadline to file your 1120. And here it is the 7th of March, so there is no time like the present to talk about filing your 1120. Unlike personal taxes, the 1120 is not really all that bad. You generally copy over your profit and loss statement into the boxes. Anything that doesn’t have a box, you add up and put in the other deductions field. Then you do a little arithmetic, or just copy your totals from the P&L, and you have your net income. You can now include your net loss from prior years against your income, then you have your income for taxes.
The amount of taxes is figured based on a table, or a straight 35% if you are a personal services corporation. There is a lot of other information on these forms and in the instructions, so make sure to go over them or have an accountant look over your numbers. Or better yet, have an accountant prepare them. I am kind of a do-it-yourself’er and I want to know how to file my 1120, so I do it myself. I spend a lot of time in the instructions and comparing to last year’s forms, so although it’s fairly straight forward, there are also a lot of gotchas to watch out for.
My thing this year is that I have to pay money on profit that is tied up in accounts receivable. I have to file as a personal services corporation so they take 35% of my net income. I mean, I am trying to be profitable and build up my cash reserves, then I am punished by having to pay taxes on it. Having to file by the 15th and pay may be a bit of a challenge this year also as I am waiting on some payments from my client. I guess we’ll see how it all works out.
I should be ready with my forms for the Federal Government and the state of Illinois by the 15th at least. I just had to get over my fear of doing these taxes. Or just the problem with being so busy right now, having just filed my personal returns, and now having to file my corporate returns. Just one of those things I guess.
Do you fill out an 1120 every year and how do you take care of it? Do you do it yourself or do you have an accountant do it? If you have an S corporation, how is it different for taxes?