Filing Form 1120: What Documents You Need?

In this fast paced world, failing to file business taxes on time can lead to penalties and levies. Whether your business is generating an income or not, your organisation is liable to file taxes to the federal government by reporting.

As your startup earns profitable income, you become qualified to pay taxes to the US Federal and State government.

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*Income tax returns are due on the 16th of October 2023 (for calendar year companies). Check this out - https://www.inkle.io/filings/form-1120

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Filling Out Form 1120 : Everything You Need To Know

IRS Form 1120 is used for filing returns for corporate income taxes to the IRS.

Also called the US Corporation Income Tax Return, is mandatory to be filed by domestic corporations, including foreign-owned corporations, operating in the United States.

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What Documents Do You Need To Submit?

In order to produce your tax returns more efficiently and quickly, you will need some documents by your side that can help you fill that faster. Make sure all your financial records are accurate and up-to date.

To complete the form 1120, C-corporations must provide the following documents:
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Certificate of Incorporation

Employer Identification Number / EIN Issuance Letter [EIN]: It refers to the Issuance Letter, referred to as EIN, which assigns a unique identifier to the corporation, facilitating tax reporting and compliance.
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Cap-Table: An overview of the company's ownership structure, helping the IRS assess shareholder interests and capital contributions accurately.

US Corporate Financial Statements

Dividends: This includes distributions to shareholders and are an integral consideration for calculating tax obligations. 

Royalties: While reporting income, the money received in royalties is also taken into action while calculating taxes.

Interest: A company’s overall taxable income is highly determined by the interest it earns. 

Capital Gains: These are the realised profit and losses from the assets sale that impacts the computation of taxes.

Deductions and Expenses: In order to save the last minute calculations and tax liability, it's always better to detail out the financial statements.

Cost Of Goods Sold (COGS): Expenses related to the production of goods and services influence a company’s tax position.

Balance Sheet with Assets, Liabilities and Equity: A comprehensive balance sheet comprising of information on assets, liabilities and equity.

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Accurate and timely filing is crucial to avoid penalties and maintain compliance with U.S. tax laws. Many cross-border founders enlist the help of tax professionals or accountants with expertise in international taxation to ensure accurate and efficient filing.

Here are some form filing tips for startup founders

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Takeaway?

Form 1120 is a vital component of a cross-border founder's U.S. tax compliance obligations. Understanding the nuances of how this form is filed and submitted duly, along with the complexities of international tax regulations, is important for ensuring that your business operates smoothly and avoids potential tax pitfalls.

By taking the time to educate yourself and seek professional advice, you can navigate the U.S. tax system successfully and focus on growing your cross-border business in the United States.

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