Company Tax Return And Business Tax Return

A tax return is a complete document containing information about the income earned with the amount of tax payable to the government. This tax is used by the government to fund money to other institutions such as hospitals, military, education and infrastructure. The company tax return is a formal declaration that must be filed with the revenue and taxation office of respective countries each year. This tax is imposed on all the corporations operating within the country. The tax return may be applied on: 

  • Indigenous companies directly incorporated with the country 
  • Companies that are doing business in that country with the income collected from that country 
  • Foreign corporations who have permanent establishment within the country 
  • Corporations deemed by the government to be resident for tax purposes 

Most corporate systems file an annual tax return. The tax return must be fairly simple. Too complex a declaration can be time consuming. As the IRS states that average time to complete the entire tax return must be 56 hours. Tax return dates vary from jurisdiction and fiscal year. Some governments require companies to give an estimate of their monthly taxes but the final tax return is to be filed on the given due date. Business tax return is a statement of income and expenditure of the business you own. It contains details about the assets and liabilities held by the business such as fixed assets, loans given and received, debtors and creditors of the business. The type of business you own determines what taxes you pay and how you pay them. There are five types of business taxes: 

  • Income tax 
  • Estimated tax 
  • Self-employment tax 
  • Employment tax 
  • Excise tax 

Income tax return is a document containing declaration of the entire income of the business. All businesses except partnerships are required to file income tax return. Partnerships on the other hand file information return. An employee usually has income withheld from his pay. Estimated tax requires a person to pay taxes by regular payments of estimated tax return that year. Self-employment tax returns are designed for individuals who work for themselves. Self-employment taxes are applicable when the income of the individual is more than a fixed amount. These include fishing crew members, notary public and international organizations employees. Employment taxes are applicable on individuals responsible for a number of employees. If you have employees, you have to pay taxes and file tax return forms. These taxes include income withholding and federal unemployment tax. 

Excise tax is applicable on a business if you perform any of the following functions: 

  • Manufacture or sell a certain product 
  • Operate various businesses at the same time 
  • Use multiple facilities and equipment 
  • Receive payment for certain services tax-services