The first step in creating a new Business Tax Return is gathering all of the appropriate paperwork. This includes financial statements, receipts, asset records and any other documentation, such as Forms Misc-1099, that will be required to file the return. This step is essential to accurately prepare the Tax Return. Most of the data entered into the program should come from the financial statements.
Follow these steps to create a Business Return:
1. Click the Add New button from the Toolbar. The Add New Corporate Return window will open.
2. Enter the EMPLOYER ID NUMBER. You can move from one field to the next by pressing Enter or Tab on the keyboard. It is not necessary to enter the dashes in the employer identification number. (Example: 05-1234567 can be entered 051234567). This number is assigned to the business by the IRS. It may also be referred to as an FEIN.
3. Re-enter the same employer ID number next to CONFIRM ENTRY. An alert will appear if the number does not exactly match the previous entry.
4. Select the type of Business Entity from the choices as follows, and click OK.
a. Select 1065 if you are preparing a federal Tax Return of Partnership Income. This form should be used if more than one individual has engaged in a business activity, and those individuals have not officially incorporated or are an LLC that has not properly requested an S-election status. If there is only one taxpayer engaged in the business activity, file Schedule C with the personal return instead.
b. Select 1120S if you are preparing a federal S Corporation Tax Return. This form should be used if the business entity has incorporated or organized as an LLC, and the business entity has properly requested an S-election status.
c. Select 1120 if you are preparing a federal Corporation Income Tax Return. This form should be used if the business entity has incorporated and has not properly requested an S-election status.
d. Select 1041 if you are preparing a Federal Tax Return for estates and trusts that earn income during the course of the year.
e. Select 990 if you are preparing an annual reporting return that certain federally tax-exempt organizations must file with the IRS. It provides information on the filing organization's mission, programs, and finances.