Federal Tax Return: The Dread Of Filing My 1120

federal tax return - form 1120If you did not know by now, your United States C corporation 1120 federal tax return is due in April this year (2017) rather than March, assuming your business runs January through December.  Note that I am not a CPA so I am not an expert on all things taxes, I just know that Illinois and the Federal Government made this deadline change in 2017.  This does not mean that I am ready to file or pay, though I always have good intentions.

My main complaint with filing my 1120 is that it is busy work.  While it might be my only federal tax return that I file for the corporation, it is certainly not the only filing I make during the year, or the only paperwork that needs to be done.  I know, I know, the tax man needs his money, but it comes at the expense not only of cash, but of my time to do more financially productive things.  Here is an idea of all the busy work you must do with a corporation:

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10 Reasons I Did Not Create A Video In The Past Week

I am not sure if this is a compelling headline but here goes…  The top 10 reasons I did not create a YouTube (or any other) video this week:

#1. 350 unique visitors per day on splashplan.com

We continue to have a large number of unique visitors as well as 15 – 20 new member profiles created per day.  I am still grappling with what that means as far as security, bad data, and possible software bugs.

#2. Still working on the new blog at splashplan.net

I edited about three months worth of posts this weekend, and have many more months to go.  I am concerned about content that is not mine… although so far it has been cited correctly when I use a guest blog post.

I have a lot of garbage to delete or edit so it has proven to be productive.

#3. Fixed the member’s area downline list so it no longer breaks its frame.  It was only an issue for my id but still needed it corrected.

#4. As part of correcting the downline list page, I created approvals screens so we can review changed member profiles.

We just wanted to make sure member profiles had good links mainly.

#5. Taxes taxes taxes

It is that time of the year so I have been working on my personal taxes, the business ST-1 (sales tax), the yearly corporate report, California taxes (still owe them one year), and the corporate 1120s.  I figure if I complete one task per weekend for taxes I am doing good.

#6. 40 hours per week for a client

I am still working for a client at 40 hours per week and they need things from me… mostly technology related.  I love the client so its just about getting things done.

#7. I am still married

Paying attention to my wife is a good idea every tonow and then.

#8. I have parents

My mom is concerned because I jump on a jet weekly.  I need to let her know when I am leaving and getting there at minimum.

#9. I have great children

My children are doing great things and like to talk with me every now and then.  I’ve been subbing the wife temporarily but eventually I need to keep up with them.

#10. I have a grandchild

Owen is wrestling tomorrow so I will probably be at wrestling tomorrow.

Is no time to make a video a good enough excuse?  I seem to have time to write…

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?