C-Corporation files Form 1120

S-Corporation files Form 1120S

Every corporation must file a tax return regardless of the amount of income or loss. A corporation must continue to file until it is dissolved. The return must be filed by the 15^th day of the third month following the close of its tax year.

• A C-corporation is considered a separate taxpaying entity. The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. This creates a double tax. Income is taxed to the corporation starting at 15% up to a maximum 39%.
• An S-corporation reports the profit or loss to it’s shareholders on Form K-1 and the shareholders pay the income tax on their individual returns.
• If the corporation is not able to file the federal return by the due date an automatic
• 6-month extension can be filed. An extension of time to file the return does not extend the time for paying tax.