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In: Economics

Give short definition and example for the terms: - Form 1120 -Form 1120 s -Form 1041...

Give short definition and example for the terms:

- Form 1120
-Form 1120 s
-Form 1041
-Form 1065
-Form 1040
-Form 2553
-Form 1099 div
-Form 1099 inv
-Form 1099 B
-K-1

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ANS-

Form 1120-It is the form of US corporation income tax return which is used to report corporate income taxes to the IRS. It is also used to report income for other business entities that have elected to be taxed as a corporation. For example- A limited liability company that has filed an election to be taxed as a corporation.

Form 1120 s-Form 1120s is a tax document used to report the income, losses and dividends of S corporation shareholders. For example- S Corporations are a form of corporate structure that allows businesses to pass corporate income, losses, deductions, and credit through to shareholders for federal tax purposes.

Form 1041-Form 1041 to report:

  • The income, deductions, gains, losses, etc. of the estate or trust.
  • The income that is either accumulated or held for future distribution.
  • Any income tax liability of the estate or trusts.
  • Employment taxes on wages paid to household employees.

Form 1065- It is a tax document used to declare the profits, losses, deductions, and credits of a business partnership. It shows the IRS a snapshot of the company's financial status for the year. For example-All domestic partnerships file the U.S. Return of Partnership Income i.e form 1065.

Form 1040-It is one of three IRS tax forms used for personal /individual federal income tax returns filed with the Internal Revenue Service (IRS) by United States residents for tax purposes.It is the main tax form filed by individuals who are deemed residents of the United States for tax purposes.

Form 2553-It is the s-corporation election form that a startup company must file with the Internal Revenue Service in order to elect pass through taxation.

Form 1099-DIV- It is a form sent to investors who have received distributions from any type of investment during a calendar year.It is one of many 1099 forms an individual may accumulate for a given tax year. For example-The investors receiving a Form 1099-DIV will have ordinary dividends, qualified dividends or total capital gains.

Form 1099 INT-It is the IRS tax form used to report interest income. The form is issued by all payers of interest income to investors at year end and includes a breakdown of all types of interest income and related expenses. For example-Brokerage firms, banks, mutual funds, and other institutions are required to file on interest over $10 paid during a year.

Form 1099 B-It is an IRS tax form that is issued by brokers or barter exchanges. The Proceeds from Broker and Barter Exchange Transactions forms the lists of gains or losses of all broker or barter exchange transactions.

K-1 -A Schedule K-1 is a tax document used to report the incomes, losses and dividends of a business's partners or S corporation's shareholders. The Schedule K-1 document is prepared for each individual or private partner and is included with the partner’s personal tax return. For example, A partner contributes $50 in cash and $30 in equipment to a partnership, and the partner’s share of income is $10 for the year. The total basis is $90, less any withdrawals taken by the partner. The basis calculation is important, because when the basis balance is zero, any additional payments to the partner are taxed as ordinary income. The basis calculation is reported on Schedule K-1 in the partner’s capital account analysis section.


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