Understanding Form 1120-S
Understanding Form 1120-S Form 1120-S is the name of the tax return for S-Corporations. It calculates the business’ taxable income and liability, which is passed on to shareholders to report on their personal tax returns. In this article, we will go over some basic information about Form 1120-S. Required Information First, you will need basic information that is easy to locate. Such as the name and employer identification number of the business. You will [...]
Form 1065-Partnership Tax Return
Form 1065-Partnership Tax Return A Form 1065 allows a partnership to report their financial activities to the IRS. This would include profits, losses, deductions, and credits. Partnerships do not pay income tax with this return. Rather they pass the profits or losses on to the partners to report to their individual tax returns. Partnerships that can use Form 1065 include general partnerships, limited partnerships, and LLCs qualified as domestic partnerships. Filing Process Your Form [...]
Schedule K-1 Basics
Schedule K-1 Basics A Schedule K-1 is an IRS form that reports your share of an income or loss from a pass-through entity. It prevents double taxation by avoiding taxes at the entity level and shifting the liability to the owners/beneficiaries who will report income or loss on their personal tax return. In this article, we are going over the basics of how a Schedule K-1 works and what it reports to the IRS. [...]
Kiddie Tax Basics
Kiddie Tax Basics The kiddie tax was introduced by The Tax Reform Act of 1986. It was set up to prevent parents from transferring wealth into their children’s names for the sake of reducing tax liability. In this article, we will go over the basics of how the kiddie tax works. The Basics Kiddie tax applies to individuals who are under 18 and full-time students under 24. Only unearned income is subject to kiddie [...]
How to Prepare for Tax Season
How to Prepare for Tax Season Want tax season to go by smoothly this year? Then you should start preparing now. In this article, we will go over 5 steps that will help you to prepare for tax season. 1. Understand Your Filing Status There are five potential filing statuses. These include single, head of household, married filing jointly, married filing separately, and qualifying widow/widower with a dependent child. The status you choose will [...]
Alternative Minimum Tax
Alternative Minimum Tax Alternative minimum tax ensures that those with high income by ensuring they pay at least a minimum amount of tax. It prevents high net worth tax payers from over utilizing certain tax benefits to greatly limit their tax liability. In this article, we will go over the alternative minimum tax. How AMT is Calculated You must calculate tax liability twice. Once under the ordinary income tax and once under alternative minimum [...]