What are the tax liabilities for Business Entities?

Modified on Tue, 20 Dec 2022 at 02:17 PM

If the company is registered as:

  • Partnership - there is no tax liability payment under a partnership return; any tax liability owed for the partnership is done by separate partners through their Schedule K-1.
  • Multi - member LLC - In the case of multi member LLC's,  all the income flows to the underlying members and the company per se has no tax liability.  The taxes owed by the company are always zero as the taxes flow through to the members and are part of their personal taxes.
  • S-corp - is a corporation that elects to have all of the tax liability, profits and losses pass  through to the shareholders for federal tax purposes.  The business tax liability is zero; S- corp have no profit or loss for tax purposes.  Shareholders profits, losses and deductions are documented in Schedule K-1.
  • C-corpA Subchapter C Corporation is a specific type of business entity under the laws of the United States. Being a corporation, it exists as an entity independent of its owners, whose ownership comes in the form of shares of stock and must pay income taxes on the corporate level. To calculate the tax liability of a Subchapter C Corporation, you must take a number of issues into consideration:
    • the business's total revenue
    • total non-capital business expenses for the tax period.
    • total capital business expenses

 

 

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