A corporate tax is a levy placed on the profit of a firm to raise taxes. After operating earnings is calculated by deducting expenses including the cost of goods sold and depreciation from revenues, enacted tax rates are applied to generate a legal obligation the business owes the government.

A Schedule K-1 is produced for each partner and then you use that K-1 to determine the income that is reported on your personal Form 1040. If you are organized as a C Corporation or S Corporation, you should file a Form 1120 or Form 1120S.

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