Some businesses will have an accountant or bookkeeper by this stage who will handle these responsibilities. Many businesses won't. Either way, it is helpful to understand the requirements so you can make sure stay in compliance.
In California both S-corporations and C-corporations pay corporate income tax using this form.
Quarterly estimated tax payments should be mailed to the Franchise Tax Board.
Because of the minimum annual tax (franchise fee), all corporations must use this form,
even if they didn't have a quarterly net income or paid their net income out as salaries
Estimate the corporation's year-to-date net income.
If you are unsure what makes up net income, look at the front page of IRS 1120.
Estimate the corporation's net income for the remainder of the year.
Add the two and put the total on line 1 of 1120-W.
Multiply the first $50,000 of line 1 by 15%; the next $25,000 by
25%; and the next amount up to $9,925,000 by 34% and any remaining amount by 35%.
These lines are for excess tax if you are a personal service
corporation or had net taxable income over $100,000.
Subtract any expected tax credits to calculate total estimated
tax on line 22.
If you were in business last year and are not a
enter your tax from last year on line 23a. You must pay the smaller of this year's tax (line 22)
or last year's tax (line 23a). Divide it by the number of installment due dates left.
If you were not in business last year,
skip line 23a and divide your estimated tax by the number of installment due dates left.
Pages 2, 3
If your corporation's income is seasonal, you may complete
Schedule A or Part II to reduce
your quarterly payment.
Under $500 in tax?
If your total year's tax is under $500, you do not have to make
quarterly payments. If it is more than $500, you must pay 100% of your tax through
quarterly estimated tax payments. In future years, small corporations may pay 100%
of last year's tax. Large corporations can use last year's tax to estimate their first
quarter's payment only.
April 15, June 15, September 15, December 15.
Any tax due on your annual tax return is due March 15 of the following year
(the same date as the annual tax return).
This form is used to report and pay state sales tax. If you
registered for a sellers permit, you must complete
this form, even if you only sold wholesale and don't owe sales tax.
Before we begin
The goal of the BT-401 form is to calculate sales tax and then divide it
into the proper categories.
The basic 7.5% state sales tax is actually three state required taxes: 6.25% state sales tax, ¼%
county tax, and 1% local tax.
In addition, if you conducted business in any other county or city that voted to increase its
sales tax beyond 7.5%, there are one or more district taxes with tax rates ranging from .0125%
Usually a quarterly payment and reporting requirement
Usually one month after calendar quarter-end:April 30, July 31, October
31, January 31. A few businesses complete this form annually, large businesses complete it monthly.
What you have to know
Before completing this form online or on paper, you need to know:
Your total sales - with and without sales tax
Your total non-taxable sales
The sales you made in each special taxing district in California (Sales made in districts where you have facilities or people - including your delivery people.)
The Dept. of Tax and Fee Administration doesn't want to know how much sales tax you actually collected - because you are responsible for collecting the right amount. They are only concerned with your total sales.
How to submit
There are two ways to submit BOE-401 and pay sales tax.
Dept. of Tax and Fee Administration
PO Box 942879
Sacramento, CA 94279-7072
Want to pay by credit card? Go to http://www.boe.ca.gov/elecsrv/internet.htm. The regular merchant fee for
credit card transactions (about 2.5%) will be charged to you as a "convenience fee". You can also pay with your credit card over the phone by calling 1-800-2PAY-TAX. The
same fees apply.
This form reports the same non-salary income as 1040ES.
Each shareholder who receives non-salary income during the quarter should
complete this form unless they have regular withholding on at least 90% of their total
S-corporation shareholders owe quarterly estimated tax payments on their share
of the corporations' net income.
C-corporation shareholders only owe taxes if they received dividends during a quarter.
For nonresidents (or partial year residents) only.
$108 times the number of adults plus $333 times the number of your dependents.
Line 4 minus line 6.
Unless you had tax credits on last year's tax return (for
joint custody, dependent parent, head of household, etc.) or had installment interest
income, skip lines 9 to 17.
Total tax due: assuming that you had no credits, the same as line 7.
Amount to avoid penalties. Enter either 90% of line 15 or 100% of last year's tax, whichever is less.
Farmers, fishermen and people with income over $169,740, see the form for special instructions.
Income tax that will be withheld during the year through payroll deductions on other jobs.
Total tax that must be deposited with Form 540-ES this year (line 20 minus line 19).
Divide line 21 by the number of quarterly due dates before
next April 15th. For example, if it is June 2,
divide by 3 (June 15, September 15, and January 15). Pay this amount this quarter.
April 15, June 15, September 15, January 15.
There are three payment options for shareholders:
Pay online. To do this, each shareholder must first obtain a customer service number online. You will need your social security
number and your gross wages (for California) from last year's tax return.