Corporate Tax

What are corporate tax services?

Every business needs to pay corporate taxes. While the law is complicated and there are many exceptions, a corporate tax accountant can help companies determine what corporate tax services they need in order to maintain compliance with federal corporate tax law requirements.

Every year, businesses must file a corporate income tax in addition to any other types of corporate taxes required by their state or city government.  Because corporate tax returns and laws are complex and change frequently, most people cannot afford to handle these matters on their own. This is when professional accountants come in!

An expert corporate tax accountant will be able to offer advice on avoiding costly mistakes that could result in penalties or even jail time for an oblivious company owner if proper care is not taken when filing corporate income tax return.  Professional accountants like chartered professional accountants or an accounting firm will know how corporate tax laws work and can provide corporate tax services that ensure compliance.

Corporate tax returns are a broad topic, but chartered professional accountants typically offer guidance on the following types of corporate tax return:

  • Federal corporate income tax  (also called corporate earnings tax or corporate taxes)
  • Provincial taxes
  • Local business licenses and permits  (required by many cities)

The fees for these forms of corporate taxation services will vary based on how complicated a company’s operations are, along with other factors that impact what type of service is required.  Accounting professionals who offer a full range of corporate taxation services also understand which companies require more in-depth in order to fully understand their obligations under corporate tax law. In addition to a corporate tax return, a corporate tax accountant will also offer services related to payroll taxes and small business income.  However, it is important for a company that does business in more than one state or city to find an accountant who offers corporate taxation services that are valid in their locality. It’s important that you find professional accountants to file your corporate income tax return, and ensure that your financial statements are all properly handled.

Even if a business is small enough that it does not need corporate taxation services, they may still need to file corporate income tax returns.  Typically, this filing requirement applies only to companies with annual taxable income of $5,000 or more or which have employees.  However, some states will also require smaller companies with income over a certain threshold to pay corporate income taxes as well.  A corporate tax accountant can advise companies and the self employed on corporate taxes they need to file.

Every charted professional accountant specializes in corporate taxation that relates to a specific industry or corporate structure type.  For example, an accountant who works primarily with real estate corporations would have the expertise required to offer corporate taxation services related to property management firms. However, there is also the option of hiring a general accounting firm which will have a slew of general accounting services for you to choose from when it comes time for income tax return season.

A corporate tax accountant is an expert at helping companies find the lowest possible rates for corporate taxes while still meeting all filing deadlines and staying within their state’s corporate income tax laws.  With so many options available it is important for business owners to use this resource rather than trying to handle complex corporate taxation issues on their own.

What is Corporate income tax

Tax in general just refers to taking a small portion of profits made by companies and given to the government. Corporations must pay this tax if their total taxable income makes them liable to taxing.

Corporate tax is paid by companies and corporations as well as the owners of these entities. Corporate taxes are tiered, so that companies with higher incomes pay more than those with less: tiered rates allow for differentiation between types of business yet encompass all within the tax bracket. This means that larger businesses will pay more in tax filing than smaller ones, because they generate larger taxable incomes.

Taxable income can be calculated as gross receipts (revenue) minus any relevant costs such as labor costs and cost of good sold. If there is no change to net revenue, then there is no change in taxable income. Expenses incurred before earning revenue are deductible; however, they must be proven to permit accurate calculation of taxable income. The tax paid by the corporation is levied upon shareholders when earnings become dividend income or capital gains.

Sharing corporate taxes with shareholders helps make them more responsible for their business decisions and encourages growth rather than just taking money out of the company. However, this only works if corporations actually pay dividends! If they don’t, then shareholders won’t think about how to generate more revenue – they’ll just want to take every last penny out of the company while it’s still around.

To illustrate this concept adequately, consider a corporation that makes 1 million dollars per year in revenue but pays nothing in tax. That means the owners of this corporation make 1 million dollars in dividend income (likely as not, they’ll take it all at once and run).

If these same owners had to pay 25% corporate income tax, then only 750k would be available for dividends – and that’s assuming there were no other costs involved that might prevent profit!

Corporate Tax: Level 1: Revenues > $0 (not liable)

Corporate Tax: Level 2: Revenues between 0-250k ($25,000; 10%)

Corporate Tax: Level 3: Revenues between 250k-500k ($75,000; 15%)

Corporate Tax Level 4: Revenues between 500k-1 million ($225,000; 25%)

Corporate Tax Level 5: Revenues between 1-2 million $625,000; 29%

Corporate Tax Level 6: Revenues between 2-5 million $1,625,000; 34%

Corporate Tax Level 7: Revenues between 5-10 million $3,650,000; 39%

Corporate Tax Level 8: Revenues > 10 million (40%) [we could add more levels here if we wanted to]

The corporate income tax rate is also tiered for low income corporations and high income because that makes it easier on small businesses. High revenue companies with high costs can’t be taxed at a higher rate than small businesses just because they have big bills.

Tax Accounting Firm Toronto

Contact Us for hassel free service

TY Tax Accounting is the leading tax accounting company in Toronto. We take care of your taxes so you can focus on what matters most to you. TY Tax Accounting has over 20 years of experience advising businesses and individuals on how to maximize their financial potential, starting with a strategic analysis of their finances. This includes customizing budgets and setting financial goals that will lead them towards success now and into the future.

Need help with your corporate tax return?

People in need of tax accountant services may either choose to reach out to a specific company or agency that can provide these services or simply look online for free advice. Professional tax accountant services are important because people may end up facing issues with the government if their taxes are not filed properly. For example, an individual who has not filed his/her taxes for one year could receive a letter from the Bureau of Internal Revenue asking for payment for unpaid taxes. Depending on how much he/she owes, he/she might get penalty charges added to the total amount owed. Tax accountant services help individuals avoid this penalty by filing their taxes correctly and on time every year.

Individuals just need to download the necessary forms, fill them out and then submit them online for tax accountant services professionals to handle the rest. People can also send an email if they have any questions about their taxes or what they should be doing next.

Tax accountant services available online can be very helpful especially when it comes to filing income taxes. There are many websites that offer free tax accountant services to people who need help filing their taxes.

If you’re looking for an affordable accounting firm with chartered professional accountants, you’ve come to the right place. TY Tax Services has exactly what you need to file your corporate tax, from non-resident to small business tax accounting, we have you covered! Our previous clients have enjoyed our full service bookkeeping services and did we mention that you can contact us anytime for a consultation with our team? Reach out to us today or give us a call if you’re ready to satisfy your accounting needs!