Tax returns don’t have to be stressful. We have a wealth of knowledge to help you stay organized throughout the year so filing is a breeze. Our Waterloo accounting experts will offer advice for which expenses and deductions to track, how to avoid penalties, and how to get the biggest refund possible.

Should I File My Business as a C Corporation or an S Corporation?

Both C corporations and S corporations must file corporate tax returns to local, state, and federal authorities once a year. In general, any corporation other than an LLC is a C corporation. Other differences between C and S include:

C Corporations

  • Owners or shareholders are taxed separately from the entity.
  • Profits from the business are taxed at both corporate and personal levels, potentially subject to double taxation.

S Corporations

  • May pass income, losses, credits, and deductions directly to shareholders.
  • Usually associated with small businesses with 100 or fewer shareholders).
  • Offers the tax-exempt privileges of a partnership.

Once a company is established as a C corporation, it can file an option to be taxed as an S corporation, which allows tax obligations to pass through to an owners’ personal tax reporting. Our team will offer advice as to how to file for your business.

Should I Setup My Business as a Sole Proprietor or a Single Member LLC?

We can discuss the differences with you and find the best option.

When Are Corporate Tax Returns Due?

Filing due dates are different for C corporations and S corporations.

  • For C corporations, it’s the 15th day of the fourth month after the fiscal year-end. Because most fiscal years end December 31, this is usually April 15th.
  • For S corporations, it’s the 15th day of the third month, which usually ends up being March 15th.

What Taxes Do Trusts and Estates Pay?

Trusts and estates must pay a business income tax. As of today, that percentage is 4.95% of net income. Trusts also pay a replacement tax.

When income from a trust or estate is passed on to beneficiaries, they must report it on their federal income tax returns. The income is included in federal adjusted gross income (for individual beneficiaries), which is the starting point for the Illinois Individual Income Tax, or federal taxable income (for other beneficiaries).

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