Roseville Estimated Corporate Tax Accountant
Cook CPA Group
Estimated corporate taxes allow businesses to calculate the amount of taxes that they will need to pay, then pay those taxes in quarterly installments throughout the year. Estimated taxes prevent businesses from spending too much money at one time and make the process of paying taxes more manageable.
If you are a business that would like help with filing your estimated corporate taxes, get in touch with the accountants from Cook CPA Group soon. The experienced and dedicated accountants that work with Cook CPA Group will use their expertise to help clients feel secure in their financial health. Get in touch with the Roseville estimated corporate tax accountants from the Cook CPA Group today by calling (916) 432-2218.
Understanding Estimated Corporate Taxes in Roseville
The estimated tax that a corporation in Roseville pays is determined by subtracting the tax credits they plan on taking and the taxes they expect to have withheld from the taxes they expect to pay for a whole year. Sole proprietors, partners, and S corporations likely to owe a tax of at least $1,000 will need to make estimated tax payments to the IRS.
Most estimated taxes that are paid by corporations are income taxes. The rate at which corporations will have their income taxed depends on the type of business that they are. For example, businesses that are classified as S corporations will be taxed at a rate of 1.5%. C corporations that pay estimated taxes, on the other hand, pay estimated income taxes at a rate of 8.84% of their total income. Corporations may also pay estimated taxes for their federal self-employment taxes and California state taxes.
Estimated tax installment payments are due on the 15th day of the 4th, 6th, 9th, and 12th months of the year. If any of those dates falls on a weekend or holiday, the installment will be due on the following business day. For 2019, income tax accrued between January 1 and March 31 was due on April 15; taxes on income earned between April 1 and May 31 was due on June 17; income taxes from between June 1 and August 31 was due on September 16; and income taxes for September 1 to December 31 will be due on January 15, 2020.
Roseville corporations that underpay or overpay on their estimated taxes are subject to penalties. If corporations underpay their taxes, they will have to fill out Form 2220, which will tell them the amount they owe in penalties. They must apply for a refund if they overpaid by an amount that is at least 10% of the expected income liability and exceeds $500; they can use Form 4466 to apply for this refund.
Some corporations may have to reconfigure their estimated tax if they figure out that their tax liability for the year will be more or less than what they originally estimated it to be. If the calculations reveal that the corporation underestimated the amount of estimated taxes that they owe, catchup payments must be made.
An immediate catchup payment should be made to reduce the amount of any penalty resulting from the underpayment of earlier installments, whether caused by a change in estimate, failure to make a deposit, or a mistake.
Paying Electronic Deposits Through EFTPS
Estimated taxes must be paid through the Electronic Federal Tax Payment System, also known as EFTPS. The Electronic Federal Tax Payment System is a free service provided by the Department of Treasury that gives corporations access to an online portal through which they can pay their estimated taxes. It can be used to make all types of federal tax deposits, including deposits for employment, excise, and corporate income taxes.
If a corporation does not want to use the EFTPS, they can arrange for a tax professional, financial institution, payroll service, or other third party to make electronic payments for them.
Forms for Paying Estimated Corporate Taxes
- Form 1120-W, Estimated Tax for Corporations – This form is used for corporations to estimate their tax liability and to figure out the amount of their estimated tax payments.
- Form 2220, Underpayment of Estimated Tax by Corporations – Corporations (and other tax-exempt organizations) can use this form to determine whether they will be subject to penalties for underpaying their estimated tax and, if so, the amount that they will have to pay as a penalty.
- Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax – If a corporation pays too much as part of their estimated taxes, they can use this form to apply for a refund. They are only required to do so if the amount that they overpaid is more than 10% of their expected tax liability and is more than $500.
- Form 8842, Election to Use Different Annualization Periods for Corporation Estimated Tax – This form is used by corporations that would like to choose one of two options for annualization. It allows corporations to figure out what their estimated tax payments would be under each annualized income installment method.
Roseville Accountant for Estimated Corporate Taxes
Don’t let corporate taxes to be a nuisance for your business. Allow a Roseville estimated corporate tax accountant from Cook CPA Group to help you enter into a payment schedule that will allow you to pay your tax obligations over an extended period of time. Get in touch with a CPA from Cook CPA Group to learn more about how you can pay your estimated corporate taxes with the help of a qualified accountant. Call (916) 432-2218 today.