Tax Returns for C Corporation and Partnerships
Tasty Treats and Beverages is a registered company in the United States. The company was incorporated in 2004, and operates under the C Corporation for the tax purpose. A C-corporation refers as a business entity subject to the federal income tax. A company operating under the C Corporation can enjoy host of tax credit that can assist it to enjoy a tax reduction that the company has to pay to the federal government. This paper uses the excerpt from the Tasty Treats & Beverages, Inc. annual income statement to prepare the tax return for the company.(See Appendix 1).
Tasty Treats & Beverages, Inc.
Income Statement ($)
For year ended December 31, 2013
Revenue from sales
1,500,000
Total Expenses
(885,050)
Income before taxes
284,450
Federal income tax expense
96,713
Net income after taxes
187,737
As being revealed in the company statement of income data, the income before tax was $284,450 and federal income tax expenses was $96,713. The paper uses the Form 1120 to file the tax return for the Tasty Treats & Beverages. A return is the tax form used to file the federal income tax. A return is the excess tax that a company has paid during a given fiscal year. Essentially, a business entity that records a regular income, capital gains, dividends, and other profits must file tax return every year. More accurately, a tax return is accurately known as tax refund. The corporation graduated income tax rate is revealed in the table below.
Corporation Graduated Income Tax Rate
Taxable
Income
Taxable
Income ?
Tax =
Of Amount
Over
$0
$50,000
$0
15%
$0
$50,000
$75,000
$7,500
25%
$50,000
$75,000
$100,000
$13,750
34%
$75,000
$100,000
$335,000
$22,250
39%
$100,000
$335,000
$10,000,000
$113,900
34%
$335,000
$10,000,000
$15,000,000
$3,400,000
35%
$10,000,000
$15,000,000
$18,333,333
$5,150,000
38%
$15,000,000
$18,333,333
35%
$0
Source: IRS (2014)
As being revealed in the corporation graduated income tax rate, the Tasty Treats & Beverages is required to pay the 39% of the income before the tax since the income before tax more than $100,000 and below $335,000. Thus, the 39% of the company income before tax =$284,450 is $110,935.50. Thus, the Tasty Treats & Beverages was to enjoy the tax returns of $14,222.50 based on the calculation in the table below:
Tasty Treats & Beverages, Inc.
Income Statement ($)
For year ended December 31, 2013
Income Statement
Tax Return
Revenue from sales
1,500,000
Form 1120. Internal Revenue Service. USA.
Appendices
Appendix 1
Financial Statements
Tasty Treats and Beverages, Inc.
Income Statement
For year ended December 31, 2013
Revenue from sales
1,500,000
Sales returns and allowances
(25,000)
Cost of goods sold
(325,000)
Gross profit from operations
1,150,000
Other Income:
Capital loss
(7,500)
Dividend income
15,000
Interest income
12,000
Gross income
1,169,500
Expenses:
Compensation
(750,000)
Depreciation
(12,000)
Bad debt expense
(7,800)
Meals and entertainment
(3,000)
Maintenance
(2,500)
Property taxes
(10,000)
State income taxes
(30,000)
Other taxes
(11,000)
Rent
(28,000)
Interest
(7,300)
Advertising
(6,200)
Professional services
(5,000)
Employee benefits
(8,000)
Supplies
(2,500)
Other expenses
(1,750)
Total expenses
(885,050)
Income before taxes
284,450
Federal income tax expense
96,713
Net income after taxes
187,737
Tasty Treats and Beverages, Inc.
Balance Sheet
December 31, 2013
ASSETS
Cash
175,000
190,000
Accounts Receivable
63,000
54,000
Allowance for doubtful accounts
(8,000)
(7,000)
Inventory
225,000
275,000
US government bonds
30,000
25,000
State and local bonds
50,000
50,000
Investments in stock
325,000
335,000
Fixed assets
475,000
485,000
Accumulated depreciation
(198,000)
(215,000)
Other assets
11,000
12,000
Total assets
1,148,000
1,204,000
Liabilities and Stockholder's Equity
Accounts payable
225,000
200,000
Other current liabilities
135,000
55,000
Other…
