Tax Dates
Mar 15, 2008, by 202
Whenever we talk about tax, the most common day everyone knows is April 15th, the last day most people have to file their taxes. However, this date does not apply to everyone. It generally applies to self employed individuals and employees. What about corporations?
Corporations and Tax
In my The Basics of Business blog post, I described the various common business structures. If you need a quick review on which structures there are and which one I recommend, please feel free to read that post. One of the many different types of business entity is a Corporation.
For Corporations, not only is the business structure different including their tax structure, their tax date is different as well. Many people do not know this. Tax day for corporations is March 15th, one month before individual tax day. Should any tax day fall on a weekend day, such as this year, it will be move to the following Monday. In this case, corporate tax day this year will be Monday March 17th. If you can not file by this date for any reason, you can file a 6-month extension. Be sure you do one or the other because the uncle sam can be a very mean person to those who avoid paying their dues.
Corporations Types
Another note I want to make is there are a few different types of corporations but the main two that come up most often is S corp and C corp. Only C corp have the double taxation rule but there are benefits to operating under a C corp even with the double taxation in place. There are also ways to evade tax legally and we will take more about this later. LLC's can also opt to be taxed as a C corp, meaning double taxation as well or remain taxed as a pass-through tax structure such as individuals. The main reason for opting in for double taxation for LLCs is mainly for fringe benefits (which is available to corps by default).
Fringe Benefits
Fringe benefits is a subject that is rarely discussed. Fringe benefits are non-wage compensation to employees. If you don't have employees, this still may apply to you if you operate under a corp since the corp in the eyes of Uncle Sam (the tax man) is a living entity of it's own, and you are it's employee (even though you technically own it). Fringe benefits are such things has medical, dental, and life insurance. There are other things involved with fringe benefits and although we won't get into details here, we do recommend those who are interested in learning more about this, to read up on it.
Corporations and Tax
In my The Basics of Business blog post, I described the various common business structures. If you need a quick review on which structures there are and which one I recommend, please feel free to read that post. One of the many different types of business entity is a Corporation.
For Corporations, not only is the business structure different including their tax structure, their tax date is different as well. Many people do not know this. Tax day for corporations is March 15th, one month before individual tax day. Should any tax day fall on a weekend day, such as this year, it will be move to the following Monday. In this case, corporate tax day this year will be Monday March 17th. If you can not file by this date for any reason, you can file a 6-month extension. Be sure you do one or the other because the uncle sam can be a very mean person to those who avoid paying their dues.
Corporations Types
Another note I want to make is there are a few different types of corporations but the main two that come up most often is S corp and C corp. Only C corp have the double taxation rule but there are benefits to operating under a C corp even with the double taxation in place. There are also ways to evade tax legally and we will take more about this later. LLC's can also opt to be taxed as a C corp, meaning double taxation as well or remain taxed as a pass-through tax structure such as individuals. The main reason for opting in for double taxation for LLCs is mainly for fringe benefits (which is available to corps by default).
Fringe Benefits
Fringe benefits is a subject that is rarely discussed. Fringe benefits are non-wage compensation to employees. If you don't have employees, this still may apply to you if you operate under a corp since the corp in the eyes of Uncle Sam (the tax man) is a living entity of it's own, and you are it's employee (even though you technically own it). Fringe benefits are such things has medical, dental, and life insurance. There are other things involved with fringe benefits and although we won't get into details here, we do recommend those who are interested in learning more about this, to read up on it.
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