EA Part 2-Passkey 13-14 Corporations Flashcards
(52 cards)
IRS requires these businesses formed after 1996 to be treated as corporations:
- business that refers to itself as a corp.
- joint-stock company or joint-stock assocation
- insurance companies and certain banks
- business owned by state or local govnt.
- certain foreign businesses
- any business that elects to be corp. by filing Form 8832 Entity Classification Election
All domestic corporations in existence for any part of a tax year __
must file an income tax return, including corps. in bankruptcy
Form 1120-A
used by small corps. with gross receipts, total income and total asset each under $500,000
Corporation filing deadline
15th day of 3rd month after end of its tax year
EFTPS is mandatory for C corps. with $__ million or more in assets and at least ___ or more any type return (including W-2’s or 1099’s).
$10 million
250 returns
A corp. files Form ___ to request a __month extension of time to file its income tax return.
- Form 7004 Automatic Extension of Time to File Certain Business Income Tax, information and Other Returns
- 6-month extension
A penalty for late filing is assessed at __% of any unpaid tax for each month return is late, up to a maximum of __% of unpaid tax
5% penalty
25% maximum.
The minimum penalty for any return that is over __ days late is the smaller of the tax due on the return or ___
60 days late
smaller of tax due or $135
The penalty for late payment of corporate income tax is one half of 1% of the unpaid tax for each month that the tax is not paid,
up to a maximum of 25% of the unpaid tax.
Corporations are required to make estimated tax payments if they expect their tax due to be __
$500 or more during the taxable year.
Estimated payments are due __
4th, 6th, 9th and 12th month’s of corp.’s taxable year
There is no penalty for underpayment of estimated tax if the tax is less than $__
$500, or if each quarterly estimated tax payment is at least 25% of the corp.’s current-year tax OR
if each est. tax installment is at least 25% of the income tax on the prior year return.
To apply for a tax refund, a corporation may use __
Form 1139 Corporation Application for Tentative Refund or
Form 1120X Amended U.S. Corp. Income Tax Return
If a corporation accidentally overpays its estimated tax, it may use Form __
Form 4466 Corporation Application for Quick Refund of Overpayment of Estimated Tax
*if overpayment at least 10% of anticipated tax liability and at least $500
A corporation does not receive a tax deduction for the distribution of __
dividends to its shareholders.
Accumulated Earnings Tax
If a corp. does not distribute enough of its profits to shareholders.
Levied at 15% of accumulated taxable income
Accumulated earnings of $ ___ or less allowed for most businesses, or $___ for PSC’s.
$250,000
$150,000 for PSC’s
Small corps. are exempt from corporate AMT; small if __
ave. annual gross receipts for prior 3 years (or portion therefore) do not exceed $7.5 million, or $5 million for its first 3-year period.
Form 4626
Alternative Minimum Tax - Corporations
Form 8827
Credit for Prior Year Minimum Tax - to figure min. tax credit carry forwards.
AMT may be carried forward indefinitely.
A corporation with more than $5 million in ave. annual gross receipts is required to use __
the accrual accounting method.
If corporation produces inventory, then the accrual method is generally required for sales and purchases of merchandise, unless __
ave. gross receipts are $1 million or less.
A business may use Nonaccrual Experience Method for Bad Debts for amount earned for performing services.
It is not required to accrue service-related income it expects to be uncollectible.
The difference in book and taxable income are reconciled in ___
Schedule M-1 of Form 1120 for small corps. (<$10 million in assets) or
Schedule M-3 for large corporations.
