What is a corporate tax return? (See also Tax Software Envelopes) hhhhh. In simple words, it is a form filled by a company stating earnings or losses of income by a business throughout a fiscal year. In the US, corporations generally file tax returns not only to the state wherein the business operates, but to the federal government’s Internal Revenue Service (IRS) as well.
The rules and regulations for states and other countries may differ; however, it is usually the case that the IRS obliges a firm to complete Form 1120 (or 1120S for an S corporation), together with supporting schedules.
As a rule, tax returns include all income and deductions, pretty much the same to a simple tax return filed by a citizen. The first section contains all income, while the second section shows all expenses, losses and deductions. Schedule A or Schedule C, along with other parts of the form, should also be completed similar to the main form.
It is always the case that the state or federal governments established the deadline for filing a corporate tax return. More often than not, the IRS deadline is 15 March, not unless a form to extend the deadline is applied by this date. A extension is given until six months; however, interests on any amounts owed my accumulate during this time.
It is a must is to pay the tax on time, otherwise severe penalties may be enforced. This entails that a corporation has to pay the proper amount, as well as any other fees or interest allowed by the government. Because of this, many companies just opt to self-audit their books to keep any IRS or other auditor from discovering incident(s) of improper bookkeeping.
There are times when the state or federal government require quarterly payments of estimated taxes dues. In the event of an underpayment, the company must pay the amount and interest. Similarly, if there is an overpayment, the extra amount paid is reimbursed or considered to the following quarter.
A fiscal year is the 12-month period that a company reports upon in a corporate tax return. In most cases, the fiscal year is just analogous to the calendar year, which covers January to December. In other instances, a fiscal year may run from July to June, or some other cycle.