CAN SOMEONE PREPARE A FORM 1120 TAX RETURN WITH THIS INFORMATION?? General Infor

Question

CAN SOMEONE PREPARE A FORM 1120 TAX RETURN WITH THIS INFORMATION??

General Information: Bob’s Building, Inc. (hereinafter “BB”) is a C-Corporation that provides training and supplies to general contractors and other individuals in the building industry. BB began its operations in 2015. The company is wholly owned by George Lopez (SSN 132-54-9876) and for book purposes the company uses the accrual basis, but for tax purposes the company uses the cash basis of accounting. BB is fully compliant in its FICA tax obligations with respect to its employees and George. The federal income taxes paid listed on the income statement below represents the estimated payments made in 2017. BB also has a Net Operating Loss carryforward from 2016 of $19,000.

Bob’s Building, Inc. Income Statement

Revenues Sales $5,250,000 Returns ($45,000) Allowance for Doubtful Accounts ($150,000) Net Sales $5,055,000

Cost of Goods Sold Materials ($1,345,000) Production Labor ($143,798) Repairs & Maintenance ($100,000) Cost of Goods Sold ($1,588,798)

Gross Profit $3,466,202

Operating Expenses Marketing and Sales ($187,268) General and Administrative ($258,770) Rent ($360,000) Depreciation ($594,679) Miscellaneous ($30,000) Total Operating Expenses ($1,430,717)

Other Income Gains (Losses) ($8,000) Net Income before Taxes $2,019,485 Taxes ($250,000) Net Income $1,769,485

Income Detail: BB wrote off $100,000 of non-collectible accounts in 2017 from sales that had occurred in 2016. Also, BB’s beginning accounts receivable were $245,000 and its ending accounts receivable were $210,000. The company’s returns accounts and Cost of Good Sold were maintained in accordance with tax principles. The company’s beginning inventory was $850,000 and its ending inventory was $900,000. BB made purchases in the amount of $1,395,000.

For purposes of determining any book depreciation, assume BB takes a full year of depreciation in the first and last year on a straight line basis with no salvage value and uses the same class life for book and tax.

Assets Place into Service in 2015: BB purchased furnishings and other equipment in 2015 for $571,755 that were all 7 year property and the half-year convention applied. BB elected not to take bonus depreciation or 179 deductions on those assets, because its taxable income was negligible in that year. BBs total combined MACRS depreciation from this equipment in 2015 and 2016 was $221,726 and its book depreciation was $163,359. Assets Placed into Service in 2017: BB anticipates increasing its revenues substantially in future years, particularly 5 years from now when a current distribution agreement for its training materials expires. Consequently, BB does not want to take bonus depreciation on any newly acquired assets with class lives longer than 5 years, but bonus depreciation may be taken on any assets with class lives of 5 years or less that qualify. BB purchased and placed into service the following business assets in 2018. BB purchased an inventory management system that consists of computer hardware costing $500,000 (5 year class life) and an order processing machine that cost $2,800,000 (7 year class life for book and tax). These assets were placed into service on March 1st.

Trade-In of Vehicle: BB also traded in its old delivery truck for a new delivery truck (both 5 year class life assets) on November 1st and immediately placed the new truck into service. The new truck cost $35,000, but BB received $10,000 of credit on the trade-in of the old vehicle and paid the remaining $25,000 in cash. The old vehicle was a 5 year asset that was acquired in the first quarter of 2016 and its original basis was $30,000. BB used the mid-quarter convention in 2016 and the total tax depreciation on the old vehicle from prior years was $18,300.

Other Expenses Rent for BB’s office, warehouse, and production facility is $30,000 per month paid on the first day of each month. George pays this rent via an automatic monthly charge to a business credit card and the credit card balance is paid off when due 50 days later by check drawn on the company’s bank account. BB also incurred the following expenses, all of which were paid for using company checks: (i) Advertising $75,000, (ii) Client Development Meals $5,000, (iv) OSHA Fine $25,000, (v) Liability Insurance $25,000, (vi) Machine Repairs $100,000.

Employee Expenses: BB has 6 full-time employees in addition to George. The company has three warehouse workers that work directly with marketing products and supplying the company’s product to its customers. The company also has a team that handles the production of the training materials including a production manager, post production director, and a chief of marketing and sales. George works as the President and CEO and also the primary talent in all of the training materials. George doesn’t take a base salary since he’s paid out of the profits of the business, but he does receive health insurance. All salaries were paid during the year via direct deposit into the employee’s bank accounts and the salaries and fringe benefits are listed below for each employee as well as whether the employee’s income and benefits are allocable to COGS for both tax and book purposes:

Name Position Base Salary Health Ins. FICA Tax (empl.) COGS

1. Betty A. Warehouse - Logistics $50,000 $10,000 $3,825 N

2. Frank K. Warehouse - Purchasing $50,000 $10,000 $3,825 N

3. Bob B. Warehouse - Processing $50,000 $10,000 $3,825 Y

4. Sheila C. Production Mgr. $80,000 $10,000 $6,120 N

5. Samuel W. Post Production $65,000 $10,000 $4,973 Y

6. William Z. Chief of Mkt & Sales $95,000 $10,000 $7,268 N

7. George L. President/CEO/Owner $0 $10,000

Explanation / Answer

How Does a enterprise Pay revenue Taxes?
A manufacturer is break free its homeowners (shareholders) in phrases of income taxes. As a separate entity, the company's house owners do not pay the taxes for the manufacturer. A corporation can pay earnings tax by using submitting a company tax return on form 1120 and paying the taxes as indicated by means of this return. Corporate income taxes are paid on the company income tax price, no longer the individual tax price.

This text will give you a normal overview of a company revenue tax return, so you will see the knowledge you want to your corporate revenue tax return. You may decide that you need to do your possess company tax return, or you might have considered trying a tax reputable to do it for you. If you wish to use an skilled tax preparer, this article can support you put together documents and offer you an understanding of the varieties and schedules you'll be able to need to give your tax man or woman.

Should You Do Your possess corporate revenue Tax Return?
Company revenue taxes are complex. As you'll see, there are a lot of types and schedules that have got to be completed - and all must be proper and complete. The essential tax program software firms have corporate tax returns you should use. If, after you read by means of this text, you are overwhelmed, begin watching for a tax preparer to help you with your online business taxes.

What is the corporate income Tax cost?
The corporate tax expense tables by means of 2017 comprise a high tax rate of 35%. The Tax Cuts and Jobs Act of 2017 decreased the top corporate tax cost to 21%.

When are corporate revenue Taxes Due?
Type 1120 must be filed by the fifteenth day of the 3rd month after the tip of your manufacturer's tax 12 months. In case your enterprise has a December 31 tax year-finish, you may need to file this tax file with the aid of March 31. If that due date is a weekend or excursion, the return is due the next trade day. This article on tax due dates for the present 12 months offers you the targeted due dates.

What is IRS type 1120?
Kind 1120 - U.S. Manufacturer income Tax Return is the form used to record company income taxes to the IRS. Kind 1120 can also be used to report sales for other business entities that have elected to be taxed as a company (an LLC that has filed an election to be taxed as a enterprise, for example). Type 1120 just isn't used to file an revenue tax return for a Subchapter S organization; this trade sort files its industry tax return on type 1120-S.

How Does a company Pay earnings Taxes?
A company is break free its owners (shareholders) in terms of income taxes. As a separate entity, the corporation's house owners do not pay the taxes for the organization. A enterprise can pay earnings tax via submitting a corporate tax return on kind 1120 and paying the taxes as indicated by using this return. Corporate income taxes are paid at the company earnings tax cost, now not the private tax expense.

This article gives you a normal overview of a corporate sales tax return, so you will find the expertise you want for your corporate income tax return. You may decide that you want to do your own company tax return, or it's your decision a tax reliable to do it for you. If you want to use an skilled tax preparer, this article can support you put together documents and provide you with an figuring out of the types and schedules you'll be able to have got to provide your tax man or woman.

Will have to You Do Your own company income Tax Return?
Company sales taxes are complex. As you'll see, there are various forms and schedules that have got to be completed - and all need to be correct and entire. The principal tax software program organizations have company tax returns you need to use. If, after you learn by way of this article, you are overwhelmed, begin watching for a tax preparer to help you with your small business taxes.

What's the corporate income Tax cost?
The company tax fee tables by means of 2017 include a top tax expense of 35%. The Tax Cuts and Jobs Act of 2017 diminished the top corporate tax cost to 21%.

When are corporate earnings Taxes Due?
Type 1120 have to be filed through the fifteenth day of the 3rd month after the tip of your corporation's tax year. In case your enterprise has a December 31 tax year-finish, you would have to file this tax record via March 31. If that due date is a weekend or excursion, the return is due the next industry day. This article on tax due dates for the present year offers you the specified due dates.

What's IRS type 1120?
Form 1120 - U.S. Company sales Tax Return is the form used to record company earnings taxes to the IRS. Form 1120 can be used to record earnings for other industry entities that have elected to be taxed as a manufacturer (an LLC that has filed an election to be taxed as a corporation, for instance). Form 1120 is not used to file an sales tax return for a Subchapter S corporation; this business kind documents its trade tax return on kind 1120-S.

Earlier than you're taking the shape to your tax preparer, you will have got to know the information required to complete this form. The information in this article is a general outline of this type to get you started gathering information to file your company sales tax return. No longer all details are incorporated, so be sure to check the form to be certain that you could reply all questions asked and furnish all required know-how.

Section 1 - basic understanding about Your enterprise

general expertise about the corporation, including identify, deal with, organisation id (EIN), date of incorporation, and complete assets. Your fiscal officers must have expertise about complete belongings; your corporate board secretary should have the leisure of the knowledge.

Part 2 - understanding About corporate income

revenue by way of category, including gross receipts, price of items offered, dividends, interest, rents, royalties, and capital positive factors. Your corporate economic officer can have this expertise.

Part three - Deductions - Tax-deductible expenses

Your fiscal officers should have all of this understanding. You do not ought to provide documentation, but you have to have entire documentation on these bills in case of an audit.

Officer compensation
different salaries/wages
Repairs and protection
bad money owed
Rents
Taxes and licenses
interest expense
Charitable contributions
Depreciation (form 4562)
Depletion
advertising
Pension, revenue-sharing, etc. Plans
employee benefit programs
home construction movements (kind 8903)
different deductions, exact in schedule
part 4 - Tax, Refundable credits, & repayments

Your company's monetary officers will have to have this know-how. Once more, be sure you've gotten documentation.

Taxable income, tax from agenda, much less any credits. If overpayment, refund quantity. If underpayment, amount owed.

Schedules. Some are required (like the balance sheet), and others must be offered if know-how is listed on the return. If in case you have a provider industry, you won't have rate of goods sold, and you don't have to furnish this agenda.  

Schedule A cost of goods offered
schedule C - Dividends and exact Deductions (word: this is not the same time table C as the one completed via sole owners as part of their private income tax returns)
Compensation of officers
schedule J - more element on tax computation, including credits and other taxes
agenda k - other understanding, about accounting method, trade variety, NAICS classification quantity, ownership of stock and know-how about shareholders.
Time table L - stability Sheet per books, at the opening of the 12 months and the end of the 12 months (the starting balance sheet will have to be the identical as final 12 months's ending steadiness sheet.
Time table M-1 Reconciliation of revenue/Loss Per books with sales per return (this is a calculation your tax preparer will in most cases have got to do.
Time table M-2 evaluation of un-approrpriated retained profits per books (one other section your tax preparer will have got to do).
If you need extra knowledge about special specifications and important points about schedules, see IRS form 1120 guidelines.

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