What is the best way to prepare and e-file Form 1120


0

I own a US C coporation and i've linked a checking account to it with an EIN. I'm a freelancer and I've received some payments for my services through Google checkout & Paypal, The total amount for the first year (2011) that has gone through my EIN was around $900.

in accordance with the EIN letter, I'm required to file form 1120 by 05/15. I'm not sure how to go through this? What steps do i need to do? I'm not sure if hiring an accountant is worth it for the amount above.

I've tried to find an online tax filing site but they were mostly for individuals.

I also heard that internet transactions might not be taxable in Delaware, is that true? I know i should still file a return.

P.S. I'm located and work from outside the U.S.

Incorporation Tax

asked May 5 '12 at 21:35
Blank
Ryan
139 points

1 Answer


1

  1. You pay taxes based on where your operations are, NOT on where you're incorporated. (Except that you also need to pay franchise taxes in Delaware + a filing fee. See http://corp.delaware.gov/paytaxes.shtml.
  2. Form 1120 is the corporate equivalent of Form 1040. You can fill out the form by hand. An accountant can do it for you, but will probably chew up most of what you made. Or, you can get TurboTax for Business and use that. Fair warning: Turbotax for business is a LOT less friendly than the version for personal taxes; there's far less explanation of what's going on, and it's just rougher around the edges.
  3. You should consider whether it makes sense for you to be operating a Delaware corporation at all. Four reasons: (a) Both your home state and Delaware will impose costs and reporting obligations -- if you were in your home state, you'd only have to deal with one state; (b) many of the reasons that people choose Delaware corporations go away when the corporation only has one shareholder; (c) a single-member LLC is disregarded for tax purposes -- as a result, you only end up filing Schedule C with your form 1040, instead of having to do a separate filing as you do with a corporation; (d) depending on what you're doing, your corporation may be a "Personal Services Corporation" under the tax code, which means that you don't have access to graduated rates -- all the income is taxed at 35%.

Note, though, that you'd need to consult with an attorney to make the best decision for you.

answered May 6 '12 at 02:37
Blank
Chris Fulmer
2,849 points
  • very helpful, I just realized as a Schedule C Delaware incorprated company I need to file this document! Doh! – Jeff Atwood 11 years ago

Your Answer

  • Bold
  • Italic
  • • Bullets
  • 1. Numbers
  • Quote
Not the answer you're looking for? Ask your own question or browse other questions in these topics:

Incorporation Tax