In addition, your corporation needs to file quarterly employer tax returns Form Moreover, after the end of the year, the corporation must issue each employee a Form W-2, Wage and Tax Statement , which is specific to that employee.
You must file copies of the W-2s, along with a Form W-3, Transmittal of Wage and Tax Statements , with the federal government each year by the last day of February.
While S corporation profits are not taxed by the federal government, they are taxed by some states. In other states, S corporations are assessed a flat fee. In states that require S corporations to pay taxes or fees, you will need to file separate state tax returns for your S corporation.
Even states that don't assess S corporation taxes or fees often require you to at least file an informational return. Apart from federal employment taxes, most states also collect employment taxes. To pay those taxes, you'll need to set up a state withholding tax account for your corporation, and report on and pay the taxes using the appropriate state forms. Check your state's Department of Revenue or equivalent state office for more details on both of these state taxes.
You also can find out more about state business income and employment taxes in other Nolo articles. S corporations themselves may owe no taxes on their profits, but that doesn't mean that handling S corporation taxes, or completing a Form S along with the required schedules, is a piece of cake. On the contrary, S corporation taxes, like traditional corporation taxes, are complicated. Just consider that the most recent version of the IRS taxpayer instructions for Form S runs to 47 pages.
Unless you are an accountant or tax expert, you should think twice before attempting to prepare your S corporation's tax filings on your own. Instead, strongly consider working with a knowledgeable tax professional. For more information about S corporations, including other tax issues, check out the other articles in the S corporation section of the Nolo website.
For state-specific information about business income and employment taxes, check out the various state guides on the Nolo site. The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site.
The attorney listings on this site are paid attorney advertising. Quarterly income tax return deadlines If the S corporation pays wages to employees, then the company is responsible for withholding federal income tax as well as Social Security and Medicare taxes from their paychecks.
Unemployment tax filing date Having employees may also require the S corporation to file an annual Federal Unemployment Tax Return each year on Form Perfect for independent contractors and small businesses Find more tax deductions so you can keep more of the money you earn with TurboTax Self-Employed.
State additional. Looking for more information? Get more with these free tax calculators and money-finding tools. Stimulus Check Calculator See if you qualify for a third stimulus check and how much you can expect Get started. Tax Bracket Calculator Easily calculate your tax rate to make smart financial decisions Get started. Self-Employed Expense Estimator Estimate your self-employment tax and eliminate any surprises Get started.
Documents Checklist Know what tax documents you'll need upfront Get started. Use this form to report deductions , gains, income and losses from the business during the current tax year. The information on Form S falls into three general categories: income, deductions, and taxes and payments. This is why good recordkeeping throughout the year is so important. Whether you use accounting software or keep all this information in an Excel file, gather all of the relevant documents on your business financials to complete Form S.
For , S-corps must file Form S by the 15th day of the third month at the end of their tax year. So if you operate on a calendar year basis, the deadline is March 15, If your business operates as an S-corp, the income you gain from it as a shareholder will pass through to your personal federal income tax return. You may not be able to file your business tax return for free through an online tax filing service, but you may still be able to file your personal federal income tax return for free.
She has more than a dozen years of experience in tax, accounting and business operations. This post is to be used for informational purposes only and does not constitute legal, business, or tax advice.
Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.
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