Filing tax return?

Question

I incorporated a month ago. I have not done anything with it yet. Do I need to file a tax return and when do I do it? A friend said I will have to file quarterly, is she correct?
I live in New York.

Thanks.

Answer 1

You must file a Federal return by March 15th, assuming you're using the calendar year, whether you have any income or loss. If your state taxes corporations you must file a state corporate return as well and pay whatever minimum francise tax is due to your state. That can run as high as $800 (in CA) so it's NOT wise to incorporate until you are ready to kick your business into high gear and actually turn a profit. (I seem to recall a minimum franchse fee in NY of around $300 or so, but don't hold me to taht.)

Most small businesses have NO need to incorporate! The tax rates are generally higher than as a Sole Proprietor, there are no exemptions or deductions to reduce your taxable income other than business expenses, the filing requirements are more complex -- sometimes MUCH so -- and there is no real benefit to you.

The only benefit from incorporating for most taxpayers is shielding your personal assets from claims against the business. If you're in a risky business, such as a medical practice, it may be of some value be even then someone can still sue you for PERSONAL liability and get at your personal assets. (Ask any doctor who was successfully sued for malpractice if his corporation or LLC protected his home -- it probably did NOT!)

The vast majority of small businesses are best served by operating as a Sole Proprietorship. You file a couple of extra schedules with your personal return, forget about corporate filings and franchise fees and taxes, and pay less tax to boot. If you need to protect your assets, buy a good general liability insurance policy. It will probably cost you less overall and will provide better protection for you.

Answer 2

You have to file a federal tax return annually. If you have income, you have to pay estimated taxes quarterly. Since you just formed the corporation, it is doubtful you have to pay any tax. Also, if you have not done any business in 2007, you don't have to file a return. Simply start your operating period in 2008.

I can't give you any New York information.

Answer 3

If a individual earned $8600 in wages (W2) and had taxes withheld then you definately could desire to record a tax return to get the withholding refunded. If a individual earned $8600 in self employed (style 1099) then definite you're liable to record a tax return style 1040, Sch C and Sch SE. solid success

Answer 4

you have to file quarterly for federal. If you don't want to be audited by NY, you should consult an accountant. Even if you haven't done anything with the corporation, an accountant could tell you if you can use your car or house payments as expenses towards tax credits in future years. It often depends on the type of business.

Answer 5

Boston's recollection is correct, as the minimum annual corporate fee in NY is $300. If you are in NYC, they have a corporate return and a $300 minimum as well.