A List of Requirements When Filing Your S Corporation Tax
One of the things that people fear the most is missing out on paying their taxes. Besides the fact that it may lead them towards more debt, it may also earn the Internal Revenue Service (IRS) ire. In such a case, it is only appropriate to settle them all on time so that you wouldn't experience any hassle along the way.
That said, one of the most valuable types of tax you would have to settle would be your S corporation tax.
If it is your first time paying for it, there is no need to worry. We have listed a couple of requirements below that you will need to pay off your S corporation tax.
1. Personal Identification Number
The IRS will require you to file your 1040 Form using your personal taxpayer identification number. You cannot use your social security number for this type of tax as it is only used for employment purposes.
2. Bank Account
Aside from your personal identification number, you will also be required to put up a bank account number. The reason is that you will be required to pay for your S corporation tax through it.
3. A S Corporation Tax Filing Form
One of the requirements you need to pay for your S corporation tax costs is to be able to complete an S corporation tax filing form. This is official paperwork that has been passed down from the IRS. You need to be able to fill in all of the fields as accurately as possible, along with the amount you will be paying for your S corporation tax.
If you cannot fill this form out, you will be required to refer to a CPA and other tax professionals to avoid any penalties.
4. Schedule K1
This is a type of form that the IRS uses to match certain companies' income and expenses, especially the S corporations. If you are the owner of a corporation, you are required to file the K-1 form yearly to settle your tax. You may have to settle for:
K-1 forms for business taxes, for example, the corporate income tax
K-1 forms for rental real estate taxes
K-1 forms for S corporation taxes
K-1 forms for partnership taxes and other types of businesses as well
5. A Form 2553 for S Corporation Election
This is another type of form that the IRS officially authorizes. The S corporation owners use this document to allow them to claim their corporation's status. The form will include:
The name and address of the business.
The list of shareholders.
The name and address of the shareholders.
The business owner's signature.
6. A Balance Sheet
If you are an owner of a corporation, you might have some doubts about how you can account for your S corporation tax. The answer is through a balance sheet. This will help you take note of the assets and the liabilities that you have for the tax payment.
Conclusion
Although there are a couple of requirements for you to pay for your S corporation tax, this is something that you need to settle in order to avoid penalties from the IRS. Take note of all our pointers, and you wouldn't run into any obstacles when it is finally time to pay your taxes.
Remember, prevention is always better than cure, and preventing any run-ins with the IRS by paying your taxes is a lot cheaper alternative than being penalized.
If you are looking for an institution that provides accounting tax services in Denver, look no further than our expertise here at Tottax. We are a tax and accounting agency helping small businesses and their owners in solving problems associated with accounting. Call us today and let us help you file all your needed taxes in time.
