Tax Returns for Partnerships and C Corporation

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

Total Expenses

(885,050)

Income before taxes

284,450

39% of 284,450 =$110,935.50

Federal income tax expense

96,713

110,935.5-96,713

=$14,222.50

Net income after taxes

187,737

$201,959.50

PART 2: Partnership Return (Form 1065)

This paper provides the Partnership Return Form 1065 for Rowdy Fun as being revealed below:

Reference

IRS (2014). 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