LLC C CorpA corporation files its own return

A corporation that lives under state law files its own federal return, Form 1120. The company is the taxpayer. Profit that stays inside is taxed there. When money comes out as a dividend, the person who receives it deals with that amount again. Owners call that the second tax. It is not a penalty. It is what the form does when the exit is a dividend.

Wages are the other exit. Pay for work the person actually did can be deducted if the pay is reasonable for that work. A wage is not chosen in public writing. We will keep the payroll records, the minutes if you keep them, and the books that show the payment. The return can then follow those records instead of a hope.

A calendar-year Form 1120 is due on the 15th day of the fourth month. Put that date on the same list as any other federal deadline. It does not care which state issued the certificate. If the year is not a calendar year, the due month moves with the year you elected, and we read that election before we promise a date.

Leaving profit in the company and taking it as a dividend are both allowed. They are not equal. The books have to say which one happened, because a bank transfer with no label is how a clean year becomes an argument. We label the transfer from the paperwork you already have. We do not relabel it to suit a wish.

This page is not the place where the certificate is born. The corporate box is the tax life that follows if you choose that kind of company. If you have not formed anything yet, you are still on the screen, and the screen is the right time to see the second tax in ordinary words.