Corporate Tax Extension Filing

Depending on where you live, the manner in which you can file a corporate tax extension normally varies from one place to another depending, among other things, on the size of the enterprise. Each country or region has a different set of tax laws and procedures governing its citizens. But more often than not, the basics of filing a corporate tax extension includes filling out forms, offering a reason for the extension and forwarding the form to the tax agency. In some cases, you might have to include payment for your estimated taxes.

Tax Agency

As you file a corporate tax extension, it is automatic that you will have to contact the tax agency. This way you can ask for more information and further details of filing, not to mention the specific deadlines that must be met.  Knowing the cut-off date is extremely important. Failing to meet it will result to late fees and penalties.

In other places, the tax agency where you have to file will directly give you a form or group of forms for filing the extension. You may mail the completed forms back to the agency, or you may just file them online (that is, if they allow such arrangement).

Estimated Taxes

When filing a corporate tax extension, you will most probably have to calculate the estimated taxes you owe. Although it is sometimes impossible to know exactly the figures, still doing so is in your company’s best interest. So, before the regular tax payment due date, make sure that you thoroughly calculated an estimate and send the approximation to your tax agency. Here, you can avoid fines and other charges that you would typically face when paying your tax bills behind schedule or sending in a payment that is smaller than required.

Other agencies

Finally, it is also important to point out that you may need to file corporate taxes with more than one tax agency. Here, you will likely have to get in touch with each agency to find out its exclusive conditions and prerequisites for filing a corporate tax extension. Also, don’t be surprised if you may have to pass a separate extension form to each agency, though several authorities may authorize you to send a national and regional extension request all together.

Tax Foundation Study: Corporate Exemptions “Generally Available” to All Industries

A new report by Washington D.C.-based think tank Tax Foundation suggests that most corporate tax exemptions in the US apply to all businesses, dispelling the prevailing thought that they target specific industries.

The study found that only about 8% of corporate tax expenditure benefits are targeted to specific business areas, such as renewable energy, insurance, oil and gas, and coal. Contrary to popular opinion, the vast majority of exemptions can be availed by nearly all corporations as part of their cost-cutting arsenal.

Tax Foundation President Scott A. Hodge says the report compares the various corporate income tax expenditures with popular exemptions for individuals and state and local governments. Most of the corporate tax exemptions were enacted for the benefit of specific policy goals defined by lawmakers, rather than favoring a particular industry.

The report further found that benefits for state and local governments were nearly twice the amount for specific industries. For instance, state and local governments enjoy up to $640 billion in tax benefits, through the combination of the deductions for state and local income and property taxes, as well as exemptions for state and local bonds.

However, the benefits for individuals far outweigh corporate tax expenditures, such as the exclusion for employer-provided health insurance and the mortgage interest deduction for homeowners.

There are roughly 80 different corporate tax expenditures, amounting to nearly $660 billion over fiscal years 2012 to 2016. In addition, the five-year budgetary cost of the exclusion for employer-provided health insurance for individuals exceeds $1 trillion, while the mortgage interest deduction amounts to over $609 billion for the housing industry.

“With the mounting federal deficits, corporate tax expenditures have come under increased scrutiny as a potential source of new tax revenues,” Hodge said. “However, considering the fact the US has one of the highest corporate tax rates in the world, lawmakers would be far wiser to consider reducing or eliminating them within the broader context of corporate tax reform and lowering the federal corporate tax rate.”