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
Who Must File
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.
1065 Partnership Income Tax Return
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 the method 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 2007, you may have to
pay estimated tax for 2008.
General Rule
You must pay estimated tax for 2008 if both of the
following apply.
3. You expect to owe at least $1000 in tax for 2008 after subtracting
your withholding and credits.
4. You expect your withholding and credits to be less than the
smaller of;
a. 90% of the tax to be shown of your 2008 tax return, or
b. 100% of the taxes shown on your 2007 tax return. Your 2007
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 ore more when you file its return.
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