Going back to Week 1, what differences do you see between individual and corporate income taxes? Do you believe corporate income taxes are complex and if so, why?
Generally, double taxation means being taxed twice on the same transaction or being taxed on a tax paint. There are a number of instances where double taxation can occur. One common example is where someone is taxed on a source of income in two different countries. For example, a US citizen resident in the UK is taxable on his worldwide income both in the UK (because he is resident here), and in the US (because he is a citizen). In practice, in this example the UK-US double tax convention would reduce or eliminate the double tax.
Personal income taxes are generally reported on a Form 1040, however with a business there are several forms that are used for returns depending on the business. Sole proprietors use the related 1040 form, as do any businesses with a pass-through structure. C Corporations must use Form 1120 and S Corporations must use Form 1120S. General partnerships use Form 1065. Filing deadlines differ between individuals and businesses. With an individual return, the deadline for filing is generally in April; however, with businesses there are quarterly estimated tax payments due the 15th days of January, April, June, and September.
