Corporations & Partnerships
Individuals
Non-Profit Organizations
International Taxation
Estates & Trusts
CORPORATION & PARTNERSHIP
Many Americans organize corporations and partnerships to do business in a more effective way. Both type of businesses are considered pass through structures where the owners or partners can legally avoid double taxation. More than sixty percent of all corporations in the US file an S corporation return or Form 1120-S. At the same time more and more partnerships are being formed and file Form 1065s. Limited Partnerships, Limited Liability Companies and Limited Liability Partnerships file partnership returns. A partnership can also choose to be treated as a corporation and file 1120S instead of 1065.
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INDIVIDUALS
The US tax law is probably the most complicated set of rules any government ever promulgated. It discusses rules of taxation, credits and deductions for individuals, tax-free income classes and other topics in mind-boggling detail. To make sure it covers all possibilities and avoid possible injustice in the system, lawmakers change it almost every year. Individuals and organizations have to keep up with all the changes in the law to ensure compliance and avoid penalties.
EXEMPT ORGANIZATIONS
An exempt or non-profit organization (EO) is a corporation or civic organization that is exempt from federal income tax under different sections of IRC 501. To be exempt from income tax, an activity has to be in line with the organizations main purpose. Some of these organizations may also be exempt from Federal Unemployment Tax (FUTA) as well.
As a result of their exempt status, EOs have strict and detailed filing requirements. All EOs regardless of their size have to file a return. However, the type of return they file differs based on the gross receipts of the organization. Most common filing is the Form 990. Form 990-EZ, a shorter form of the return is available for smaller organizations. Organizations with less than $50,000 gross receipts must file Form 990-N to avoid having their exempt status revoked by the IRS.
IF an organization has business income that is not related to its main purpose, the Form 990-T for Unrelated Business Income has to be filed. Net profit on that return is subject to taxation. Non-profits are not exempt from payroll taxes and state unemployment taxes. Failure to pay these taxes will result in severe penalties and interest payments.
Form 990 is one of the most complicated tax returns in the federal tax return universe. It is of crucial importance to have a knowledgeable tax professional or accountant to prepare these returns to avoid penalties or even revocation of exempt status. US Tax Pro employs accountants who specialize in exempt organization returns with more than 65 years of combined experience.
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