You kept it simple, gave clear explanation of each section of the return, the video was easy for me to follow along. Thanks a bunch!! Very valuable for students and small business owners!
So glad I found this channel! Starting a new job and just wanted a quick review and thorough walk-through of several returns, etc. and this is perfect. Thank you for explaining everything out, and giving examples.
This is singlehandedly THE best resource on the internet for small businesses, thank you Jason!! One quick question please, for money received via a SAFE treated as a Prepaid Forward Contract, how is it treated on Form 1120 please? Thanks SO much!!!
Thank you for the support! We do have a video in the works that discuss these tax and accounting issues for SAFEs, whether through a corporation or a partnership tax structure.
Thank you for this, every year i have such an hard time filling out form 1120 because i'm not a US citizen and need to send an envelope overseas containing the tax return.
This is awesome. My only question is: You noted at one point that the company hired contractors, and so you checked the 1099 boxes. But I didn't see that contractor pay accounted for as an expense. Should it be included in line 26 as "Other deductions" along with a statement?
I like the way you take time to explain things for a new comer like myself. I am a realestate investor but I don't have any employees but do pay through checks and cash app for the independant contractors that rehab the properties as needed. How do I show that since they are not my employees
Thank you so much for creating this video. It is incredibly helpful!!! I finally feel in control of my tax filings because of your video. After working on my forms following the video, I had following questions. I was wondering if you could provide insights into these. a) In Schedule G, what should be the Country of Citizenship for a greencard holder? b) Where to download PDFs for supporting statements? c) Should APIC amount from the first year be included in subsequent year returns beyond the first year? d) Should Beginning of Year Retained Earnings include the APIC amount? I have just one bank account for product revenue and also in which initial APIC amount was credited when the business was started. So the Beginning of Year Retained Earnings in Year 2 is actually: Initial APIC + Product revenue. Is that correct, or should BYRE be just product revenue? e) Do you have pointers for submitting previous year returns - how to obtain previous year forms, etc.? Thanks!!
A good place to search is the IRS Forms and Instructions database. They post the current and prior year versions of various forms. www.irs.gov/forms-instructions
Jason great video!! My question is how to report the dividend distribution to the shareholder? And how the shareholder report the income in his personal income tax?
The dividend distributions should be reflected on the Form 1120, as well as a Form 1099-DIV. You would file a Form 1099-DIV with the IRS to report the dividend distribution, and provide a copy to the shareholder. The shareholder reports the dividend income on their Form 1040.
Thanks for the video! You said form 5472 is very important for non-residents in US. How about a foreign citizen who is a resident in the states (green card holder)? Does that person need to file form 5472?
If you are a U.S. green card holder, then you are a U.S. tax resident. A U.S. tax resident needs to file a Form 1040, so the reporting requirements for ownership of a disregarded LLC are different than what is covered in this video.
Thanks a ton for the super helpful video - didn't ever expect taxes to be explained so succinctly. Is there any way to e-file without Windows OS? I read that paper is fine, but it would be great to be able to file online and access later.
You can paper file the tax returns, but we highly recommend electronic filing. E-filing is processed sooner and it is much more accurate. For self-prepared returns, you can use a tax software like TurboTax or Taxslayer to prepare and e-file. Their fees are very reasonable.
Yes! If a person received a taxable dividend income distribution from a corporation, those amounts would be reported on Schedule B with their Form 1040. If a person received a nondividend distribution from a corporation, that information generally wouldn't be reported on Form 1040, because nondividend distributions are a return of capital and are not subject to income taxes.
Hopefully this gets answered quickly but you mentioned in the video that the "software" labelled the meals as travel and entertainment or something like that instead of meals. I need to create a mock return for my business tax class and would love to use what you used to make this! What software was it? This video is saving my grade 🎉
The name, address and tax ID number of the corporation should be retained by the company's management. If you have a closely held corporation that needs to disclose information on substantial shareholders, then the corporation should contact those shareholders for that information.
Unfortunately, the only way to e-file this return is through an e-file software provider. So, you have to use one of the paid providers, such as TurboTax, TaxSlayer, H&R Block, etc.
Line 25 is reserved for future use, which means the corporation doesn't use this line item. The IRS puts this line in as a placeholder if they want to update the forms later and add an expense item.
Hi please how can u get the Line 26 (other deductions) Statement 5 template & Net operating Loss Carryover worksheet online. I can’t seem to find it on the IRS website. Thank you
Distributions from a C corporation to the shareholders should be reported on a Form 1099-DIV. If the corporation makes any nondividend distributions to shareholders, the Form 1120 should include an IRS Form 5452. Officers that are employed by the corporation would receive a Form W-2 to report their wages.
This was very clear and informative. I do have a question on schedule K line 13 (there are no instructions on this in the irs instructions for form 1120 & my corp did not earn over $250k. It states not to complete schedules L, M1 & M2 but to enter the amount of cash distribution and the book value of property distributions. I googled and chat gpt'd this query to no avail. Would you be so kind as to shed some light on what they are seeking here? I am not a tax professional (obvi). Thank you Jason.
Yes certain meals are 100% deductible for 2021 tax year, but some remained 50% deductible. Carefully check the character to make sure you are deducting the correct amount
Hi...thank you very much for your excelent video! Please help me with a question...have the company issue 1099-div for the $50000 distributed dividends?
I formed my company november 2021 but I didn’t start my business yet so I had no income the only expense was the forming my LLC fees and the agent fee that did my papers. How do I fill out the 1120 form?
If it is a corporation taxed as a "C" corporation, I would recommend filing the Form 1120 and all required schedules, even if you only have expenses and no revenue.
Hi Jason, thank you so much for this wonderful video. Had one question I would be grateful for an answer on. Say your startup is currently only being run by you as the only shareholder. You got the majority of shares outright. You wrote a check, say $800, to the company for the cost of those shares. Does that $800 count as income for the company and if so, where on 1120 do we note that? And, second, does the one shareholder need to report that in their personal taxes as income?
Generally, if a shareholder contributes cash to the corporation, that is not income to the corporation. The contribution of cash in exchange for stock is only reflected on the company's balance sheet. The purchase of shares are recorded on the common stock line item for the par value per share, and then any cash contributed in excess of par is recorded as Additional Paid in Capital (APIC)
@@JasonDKnott Thank you so very very much. Got ahead of myself by filing a corp in DE mid year but did not make any money. Had some expenses though (meeting meals and a laptop). So this may be easy and everything is basically 0 and I won't owe taxes, but for those expenses, can I carry over to next year in line 37? Thank you again, this video is immensely appreciated!
I formed my company, but I haven't started my business yet, so I have no income, only expenses. To fill out the form, can I just sign as CEO or do I have to hire a final consulting?
Hello. I began my C corporation in 2018, I was not aware that I was supposed to be filling out form 1120. Ive just been answering the Business questions for home based business on the 1040 A. I want to fill out all 120s for the last 3 years. How do I present to the IRS the 1120 forms for the past 3 yrs? BTW I haven't issues any stocks or anything these last 3 yrs because Corona Virus knocked me off course since march of 2020...
Your situation is a bit complex. Effectively, you were reporting corporate income and expense as a sole proprietorship on a Schedule C attached to your Form 1040. If you file original Form 1120 tax returns for the open years, it would also require amending your Forms 1040 for the years you reported the income & expense as a sole proprietor.
Yes, in order to properly launch a corporation, it must follow all corporate formalities. This includes drafting and adopting corporate bylaws, appointing directors, holding director meetings & keeping minutes, and issuing stock to shareholders.
I am a non resident. And I sold two products only with customers in the US. Do you think I qualify to use your approach in filing a form 5472? My online bank account is in US too
I filed my taxes on Monday but failed to do my 1120s. Are they supposed to be done ever quarter? I formed my business Jan 2021 . I really need help. I only had losses with no revenue.
Glad it was helpful! The statements were generated using the tax software we use, which is Drake Tax. If you want to make your own statements because you'll be paper filing the return, you can generate your own statements. However, we would highly recommend e-filing returns using tax return preparation software.
Hi Jason, We live in Hungary and created a C-corp company in Delaware through Stripe in October 2022 in order to be able to launch a Kickstarter campaign because this is not possible from Hungary. So we are non-residents, we do not live in the USA. We were not able to start the campaign in 2022, so we did not have income or expenses in 2022. There are two of us 50-50% owners in the company. Can we prepare the return based on the documents we have or should we entrust our tax return to a professional? For a company with 0 income and expenses such as ours (for which we now only have to fill out a form in principle without paying taxes) if possible, we do not want to pay additional costs if we can fill this out as well. Thanks
On the income statement items for form 1120, do you take the numbers off the company's income statement or the number that is to be taxed? For example, the straight-line depreciation expense is 90,000, but MACRS depreciation for tax purposes is 110,000. which number would I put on the depreciation expense line 20?
I'm not sure I understand your question. The entity name is reported on Page 1 of the Form 1120. If shareholders own a significant portion of the stock, their names may be disclosed on Schedule G of Form 1120.
There are so many providers out there. This tutorial was prepared using Drake Tax Software. The more popular software packages for self-prepared returns are TurboTax and TaxSlayer.
Hi Jason can you please help on M1 and M2 filer for initial return . For M1 line2 federal income tax per books for calculated automatically when we fill p&l in tax return but in your video nothing federal tax amount seen pls help me on this? and if federal tax is there then M1 line amount is not matched with p&l of internal statement.
If the employee contributed to a retirement account in 2021 & the employer had provided a matching contribution for the employee but didn't send it in until 2022 before taxes are filed, which line does the employee contribution go on & which line would the employer match go on? Also, since the employer didn't contribute the match until 2022, would it be recorded on the 2021 1120 because it was a 2021 match or do we report it on the 2022 1120 since it was withdrawn in 2022? Thank you.
Dividend are paid from accumulated earnings and profits (E&P) of the corporation. Once dividends are paid, it is a reduction to the corporation's retained earnings balance. Dividends should be reflected in Schedule L and M-2.
I formed my corporation December 2021. I really don't have much income to report but I do have some expenses. I wanted to do S corporation. I see the due date is March 15 and I have yet to figure this out. Will you help me?
Forgiveness of the PPP loans creates tax exempt income. If this is a C corporation that has forgiven debts, the income is recorded for book purposes. The tax exempt income is reported on Schedule M-1 Line 7 as tax-exempt income.
Thanks for the help in filling F-1120! Note: The link stated for F-5472 is for F-5452 (Form 5472 Nondividends: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-jSRcatAdhJg.html )
