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Why Do I Need a Consultant for My Corporate Tax?

What does a tax consultant do

Why Do I Need a Consultant for My Corporate Tax?

If you think taxes are complicated, you’re absolutely right. Even the process of learning about taxes can be extremely time-consuming. And you have no time for that right now. What you need is to focus all your time and energy on your business, especially if you are new to the business world.  Luckily for you, a skilled corporate tax consultant in San Diego can prepare your company’s taxes with efficiency and expertise and ensure that the business tax filing process goes smoothly. 

Still, it’s always good to have at least some basic understanding of how corporate taxes work. Having a trusted tax consultant by your side is the only way to get all the right information before making major business decisions. For instance, do you know how limited liability companies are taxed? Do you understand why LLC is such a popular choice of entity? An expert can give you reliable answers to all these questions and more!

What does a tax consultant do?

The job of a tax consultant, also known as a tax adviser, tax preparer or tax specialist, is to help clients prepare their taxes. Tax consultants typically handle personal or individual taxes and business or corporate taxes, although they may also represent taxpayers before the IRS. 

What are corporate income taxes?

What are corporate income taxesCorporate taxes, sometimes referred to as corporation taxes or company taxes is a tax that corporations and similar legal entities that generate income or capital are subject to. 

However, many businesses in the US are not subject to corporate income taxes. Instead, they are subject to the so-called pass-through taxation. 

The business taxes of pass-through entities are paid through the owner’s personal tax return, with the rate depending on their share in the profits of the business. Below is a list of pass-through entities:

  • Sole proprietorship
  • Partnerships
  • C corporations.

Since a limited liability company has the characteristics of a corporation and those of a partnership or sole proprietorship, it is one of the most common types of pass-through entities. But let’s go back to corporate taxes. 

How are corporate taxes calculated and when are they due?

The list of business expenses that enable corporations to reduce their taxable income is quite long because any current expenses can be deducted. This means that calculating taxable corporate profits requires that any such deductions be factored in. Allowable deductions may include the cost of goods sold, wages and other employee compensation expenses, interest, non-federal taxes, depreciation, and advertising. 

The current federal corporate tax rate on the profit of US resident corporations is flat and equals 21%. The tax rate used to be 35% but this was reduced in 2017 when the Tax Cuts and Jobs Act was adopted. 

Corporate tax returns in the US are due March 15, although a 6-month deadline extension may be granted, in which case the returns are due in September. The due dates for tax installment payments fall in the middle of April, June, September and December. The tax form used by US corporations is Form 1120. 

A trusted corporate tax consultant in San Diego can carry you through

Our experienced, highly competent tax consultants are responsive year-round. They will make sure that you don’t have to handle or worry about your corporate taxes again. All you need to do is give us a call so we can take over and get to work as soon as possible. 

We will spare you the hassle of navigating through the tax filing process so you can focus on your business in a forward-thinking manner. Call David York’s Tax Service located in San Diego’s Mission Valley today!